On Tuesday, Stifel, a financial services firm, increased the price target for Kirby Corporation (NYSE:KEX) shares to $132, up from the previous $131. The firm has sustained a Buy rating on the stock.
The adjustment follows a recent visit by the firm's analysts to Kirby's Distribution and Services (D&S) business in Houston, where they focused on the power generation segment and toured the manufacturing facilities.
The analyst from Stifel noted that Kirby's D&S business is often perceived by the market as an ancillary and cyclical venture tied to the upstream oil and gas industry, which doesn't align with the company's core barge business.
Despite this, Kirby stands as one of the top two manufacturers of fracking equipment. The analyst emphasized that the industrial side of Kirby's operations, which is frequently overshadowed, engages in various activities including supplying mobile power for emergencies and electric fracturing (e-fracs).
According to the analyst, the expansion of data centers presents a significant opportunity for Kirby's growth. The increased demand for power generation by data centers could lead to a considerable increase in the valuation of the D&S business and, by extension, Kirby Corporation's stock. This potential for growth and a revaluation of the business segment underpins the decision to raise the price target on KEX shares.
Kirby Corporation, known for its marine transportation services, has a diversified portfolio that includes the distribution and servicing of engines, transmissions, and other equipment for the oil and gas industry, among others.
The D&S segment's involvement in the power generation market, particularly with the rise of data centers, could be a pivotal factor for the company's future financial performance.
The financial services firm's updated price target reflects a modest increase, signifying a positive outlook for Kirby Corporation based on the analyst's findings and expectations for the company's industrial and power generation prospects.
InvestingPro Insights
Following Stifel's updated outlook on Kirby Corporation, it's worth noting some key metrics and insights from InvestingPro that could further inform investors' perspectives. Kirby's market capitalization stands at a robust $6.91 billion, and its P/E ratio is currently at 27.92. This valuation metric, when adjusted for the last twelve months as of Q1 2024, shows a slight decrease to 27.64, suggesting a stable earnings outlook.
InvestingPro Tips indicate that Kirby Corporation is trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of just 0.37, highlighting potential for investors looking at growth-adjusted value. Additionally, the company's strong performance is evident with a remarkable year-to-date price total return of 51.11% and a price that is at 99.43% of its 52-week high, reflecting a positive trend and market confidence. Moreover, analysts have revised their earnings upwards for the upcoming period, signaling optimism in Kirby's financial prospects.
For investors seeking more comprehensive analysis and additional InvestingPro Tips for Kirby Corporation, they can explore further by visiting https://www.investing.com/pro/KEX. There are 8 more tips available that could provide deeper insights into Kirby's performance and potential. To enhance their InvestingPro experience, users can apply the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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