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Investing.com - BofA Securities has lowered its price target on Kirby Corporation (NYSE:KEX) to $107.00 from $110.00 while maintaining a Buy rating, citing concerns about softening demand in the company’s inland barge business. According to InvestingPro data, the stock has seen significant price weakness recently, trading at $95.01, with analyst targets ranging from $107 to $125.
The firm expects Kirby’s inland barge utilization to ease into the high-80% range in the third quarter of 2025, down from the low to mid-90% range in the second quarter and slightly below the company’s target of approximately 90% for the period. This utilization level would be similar to what Kirby experienced in the third quarter of 2023. Despite these challenges, InvestingPro analysis shows the company maintains strong financial health with a current ratio of 1.74 and operates with moderate debt levels.
BofA Securities attributes the continued weakness to increased European chemical competition, refinery maintenance, and lighter crude oil crack spreads, which shift some oil transportation from barges to pipelines. These factors extend the pressures Kirby faced during the second quarter of 2025.
In response to the demand softness, BofA Securities anticipates Kirby will reduce costs by decreasing its towboat fleet, potentially removing some of its approximately 70 chartered-in vessels from its total fleet of 290 towboats. The firm estimates that reducing the chartered fleet by 20 vessels could provide up to 150 basis points in margin relief, with savings of around $0.5 million per boat per quarter. The company’s financial resilience is reflected in its healthy gross profit margin of 32% and return on equity of 9%, as reported by InvestingPro.
The research note indicates that Kirby’s inland demand could potentially see some improvement from heavier crude imports that may increase in the fourth quarter of 2025. With an overall "GOOD" Financial Health score from InvestingPro and management actively buying back shares, the company appears positioned to navigate current market challenges.
In other recent news, Kirby Corporation reported its Q2 2025 earnings, which showed a slight beat on both earnings per share (EPS) and revenue forecasts. The company achieved an EPS of $1.67, surpassing the forecasted $1.66. Revenue reached $855.45 million, slightly above the expected $852.51 million. Despite these positive results, Kirby’s stock experienced a sharp decline, attributed to broader market uncertainties and specific challenges facing the company. Investors might find it noteworthy that these developments come amid a complex market environment. The company’s performance in surpassing both EPS and revenue expectations highlights its ability to navigate current economic conditions. Analyst opinions and future projections were not detailed in the recent reports. These updates provide investors with critical insights into Kirby’s financial health and market positioning.
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