Here's Why You Should Retain Kirby Stock in Your Portfolio Now

Kirby Corporation (KEX) benefits from favorable market conditions at the marine transportation unit and consistent efforts to reward shareholders through share buybacks. However, rising expenses pose a threat to the company's bottom line.Factors Favoring KEXKirby has been witnessing favorable market conditions, such as higher pricing and barge utilization and improved term and spot pricing, in both the inland and coastal markets of its marine transportation segment. Notably, revenues for 2024 increased 11% year over year, and operating income improved 52% year over year. Given this encouraging backdrop, KEX anticipates positive market dynamics for inland marine due to limited new barge construction for 2025. Barge utilization rates are expected to be in the low to mid-90% range for the year with continued improvement in term contract pricing as renewals occur throughout the year. Overall, inland revenues are expected to grow in the mid to high single-digit range for 2025. KEX anticipates operating margins will gradually improve during the year, with the first quarter being the lowest and an average of 200-300 bps higher for the full year.For coastal marine, revenues for 2025 are anticipated to increase in the high-single to low-double digit range on a year-over-year basis, driven by higher pricing on contracts. Coastal operating margins are anticipated to be in the mid-teens range on a full-year basis, with the first quarter being the lowest due to a high number of planned shipyards.Higher cash flow generation ability (on the back of higher revenues and EBITDA amid some supply chain constraints) is an added positive. In 2024, Kirby generated $756.4 million of cash from operating activities (due to higher business activity levels), higher than the $540.2 million generated in 2023 and $294.1 million in 2022. For 2025, net cash flow provided by operating activities is anticipated in the $620-$720 million band.Kirby has been consistently rewarding its shareholders through share buybacks. During 2024, KEX purchased 1.6 million shares for $174.6 million. From the beginning of 2025 till Feb. 17, 2025, KEX purchased an additional 0.2 million shares for $26.0 million at an average price of $107.56 per share. As of Feb. 17, 2025, Kirby had almost 2.6 million shares available under its existing purchase authorizations. Such shareholder-friendly initiatives should boost investor confidence and positively impact the bottom line.KEX: Key Risks to WatchKirby’s Distribution and Services segment has not been performing well. In 2024, revenues in the segment decreased 1% year over year, and operating income decreased 5% year over year. Weakness across the commercial and industrial markets (which contributed 46% of the distribution and services revenues) and oil and gas market (which account for 18-20% of segment revenues) has hurt the segmental performance.The commercial and industrial market was weighed down by lower business levels in Thermo King and on-highway businesses due to the ongoing trucking recession. The oil and gas market was affected by lower levels of conventional oilfield activity. Given this disappointing scenario, overall segmental demand is expected to remain mixed across products and services for 2025. Segmental revenues are anticipated to be flat to slightly down, with operating margins in the high-single digits but slightly lower year over year.Rising expenses due to higher costs of sales and operating expenses and selling, general and administrative expenses pose a threat to Kirby's bottom line. During 2024, total costs and expenses rose 3.9% year over year. This was preceded by a 6.3% increase in 2023 and a 3.5% rise in 2022. High costs naturally put pressure on margins.Zacks Rank and Stocks to ConsiderKEX currently carries a Zacks Rank #3 (Hold).Investors interested in the Zacks Transportation sector may consider SkyWest SKYW and Allegiant Travel Company (ALGT). While SkyWest sports a Zacks Rank #1 (Strong Buy), Allegiant carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.SkyWestSkyWest, founded in 1972, is based in St. George and operates regional jets for major U.S. airlines. SKYW’s track record of successfully meeting the requirements of each of its airline heavyweight partners bodes well for the company. Revenues from flying agreements (which account for the bulk of the top line) are impressive owing to SKYW’s above ability. Owing to an uptick in air travel demand, passenger volumes have been upbeat and are likely to increase going forward as well. This is likely to keep SKYW's top line in good shape.SKYW has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 16.71%. The Zacks Consensus Estimate for 2025 earnings per share has been revised 7.9% upward in the past 60 days.Shares of SKYW have surged 32.1% in the past year. SKYW has an expected earnings growth rate of 15.96% for the current year.Allegiant Allegiant has an expected earnings growth rate of more than 100% for the current year. The Zacks Consensus Estimate for ALGT’s 2025 earnings per share has been revised 36% upward in the past 60 days.The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 22.93%. Shares of ALGT have lost 21.4% in the past year.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Allegiant Travel Company (ALGT): Free Stock Analysis Report SkyWest, Inc. (SKYW): Free Stock Analysis Report Kirby Corporation (KEX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks