FBR Capital Downgrades Kirby Corporation (KEX) to Market Perform

FBR Capital downgraded Kirby Corporation (NYSE: KEX) from Outperform to Market Perform with a price target of $75.00.

Analyst John Mims commented, "We continue to believe Kirby is one of the best operators in the transport space, and we are not ones to regularly traffic in reactionary downgrades, but Kirby's 1Q15 print and 2015 guidance cut (to $4.10–$4.40 from $4.50–$4.70) make it painfully clear, in our opinion, that KEX shares will remain under pressure until the company can regain its footing in terms of pricing power. This is a wobble in the market, not a downturn, and we do believe KEX could see a material rebound from current levels at some point this cycle, but until crude prices stabilize and/ or product and petrochemical volumes accelerate with panacean effect, Kirby will remain somewhat of a price taker here, thus limiting its earnings power. Kirby will host its 1Q15 earnings call at 9:00 a.m. on April 30, but we are downgrading the stock to Market Perform ahead of this call, and lowering our price target to $75 from $100. We are also lowering our 2015 and 2016 EPS estimates to $4.20 and $4.60, respectively, down from $4.65 (prior 2015 guidance was $4.50–$4.70) and $5.10. Our $75 PT is based on 8x our new 2016 EBITDA forecast and approximately 16x our new 2016 EPS."

For an analyst ratings summary and ratings history on Kirby Corporation click here. For more ratings news on Kirby Corporation click here.

Shares of Kirby Corporation closed at $81.90 yesterday.

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