BTIG cuts Kirby stock price target to $115, maintains Buy rating

On Monday, BTIG analysts adjusted their outlook on Kirby Corporation (NYSE:KEX), a company specializing in marine transportation, by reducing its price target from $140 to $115 while maintaining a Buy rating on the stock. The revision reflects a broader re-rating of the equity markets, according to the firm’s latest research note. According to InvestingPro data, Kirby currently trades at $96.78, suggesting potential upside to BTIG’s target. The company maintains strong financial health with an overall score of "GOOD" from InvestingPro’s comprehensive analysis.

Kirby Corporation’s shares are currently valued at approximately 15 times the consensus earnings for 2025, with BTIG’s estimates being about 2% lower. The firm’s 2026 earnings per share (EPS) estimate, which is around 10% below consensus, places the stock at about 14 times earnings. This valuation stands in contrast to the S&P 500’s average of 19 times 2025 earnings.

Historically, Kirby has traded at an average forward price-to-earnings (PE) multiple of around 21 times over the last 15 years, with the firm noting that this figure adjusts to approximately 17 times when excluding periods of trough earnings. The company’s PE multiple has seen lows of around 11 times during 2012 and 2016 and highs of approximately 30 times in 2017 and 2022.

The new price target of $115 set by BTIG is based on approximately 18 times their estimated EPS for 2025 and 16 times for 2026. This valuation suggests a modest discount of about one multiple turn compared to the S&P 500. BTIG’s stance on Kirby remains positive due to the ongoing strength in the company’s Inland and Coastal barge activities. The analyst highlighted that no barge growth is anticipated for this year or the next, which supports their bullish perspective.

Furthermore, Kirby’s marine business, which is focused on transporting petrochemicals and refined products, is seen as a GDP-plus business. The firm also pointed out that Kirby has no direct tariff exposure within its marine operations due to the Jones Act, which requires goods shipped between U.S. ports to be transported on ships that are built, owned, and operated by United States citizens or permanent residents. InvestingPro analysis reveals the company’s solid operational performance, with revenue growth of 5.64% and healthy profit margins. For deeper insights into Kirby’s financial health and detailed metrics, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Inflation is noted as potentially beneficial for Kirby, given that the company’s established asset base on the water could lead to higher replacement costs due to increased steel prices and other input costs, thus potentially enhancing the value of Kirby’s assets.

In other recent news, Kirby Corporation reported its fourth-quarter 2024 earnings, revealing adjusted earnings per share (EPS) of $1.29, which fell short of analysts’ forecast of $1.37. The company’s revenue was slightly below expectations, coming in at $802.32 million compared to the anticipated $803.28 million. Despite this earnings miss, Kirby’s adjusted EPS increased by 24% year-over-year, and the company generated over $151 million in free cash flow while reducing debt by $105 million. Additionally, S&P Global Ratings revised Kirby’s outlook to positive from stable, affirming its ’BBB’ issuer credit rating, citing strong credit metrics and favorable supply and demand dynamics in its marine transportation segment.

Moody’s Ratings also upgraded Kirby Corporation’s credit rating from Baa3 to Baa2, reflecting expectations of sustained improvement in credit metrics due to operational enhancements and debt repayment. Meanwhile, BofA Securities adjusted its financial outlook for Kirby, reducing the stock price target from $133.00 to $123.00, while maintaining a Buy rating. This revision accounts for increased weather-related delays affecting operations, leading to a tempered earnings forecast. Stifel analysts maintained their Buy rating for Kirby, with a price target of $135.00, citing strong demand and potential merger and acquisition opportunities in the inland barge market as catalysts for growth.

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