Kirby Corporation (KEX) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Kirby (KEX)? Shares have been on the move with the stock up 2.5% over the past month. The stock hit a new 52-week high of $84.46 in the previous session. Kirby has gained 30.8% since the start of the year compared to the 10% move for the Zacks Transportation sector and the 12.4% return for the Zacks Transportation - Shipping industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 27, 2023, Kirby reported EPS of $0.95 versus consensus estimate of $0.83 while it missed the consensus revenue estimate by 0.21%.
For the current fiscal year, Kirby is expected to post earnings of $3.70 per share on $3.1 billion in revenues. This represents a 76.67% change in EPS on a 11.24% change in revenues. For the next fiscal year, the company is expected to earn $4.84 per share on $3.19 billion in revenues. This represents a year-over-year change of 30.53% and 3.11%, respectively.
Valuation Metrics
Kirby may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Kirby has a Value Score of B. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 22.7X current fiscal year EPS estimates, which is a premium to the peer industry average of 7.1X. On a trailing cash flow basis, the stock currently trades at 13.6X versus its peer group's average of 2X. Additionally, the stock has a PEG ratio of 1.89. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Kirby currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Kirby meets the list of requirements. Thus, it seems as though Kirby shares could have potential in the weeks and months to come.
How Does KEX Stack Up to the Competition?
Shares of KEX have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Euroseas Ltd. (ESEA). ESEA has a Zacks Rank of # 1 (Strong Buy) and a Value Score of A, a Growth Score of C, and a Momentum Score of B.
Earnings were strong last quarter. Euroseas Ltd. beat our consensus estimate by 131.67%, and for the current fiscal year, ESEA is expected to post earnings of $12.62 per share on revenue of $180.7 million.
Shares of Euroseas Ltd. have gained 31% over the past month, and currently trade at a forward P/E of 2.23X and a P/CF of 1.94X.
The Transportation - Shipping industry may rank in the bottom 82% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for KEX and ESEA, even beyond their own solid fundamental situation.
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Kirby Corporation (KEX) : Free Stock Analysis Report
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