Intrinsic value of Kirby Corporation - KEX

Previous Close

$79.32

  Intrinsic Value

$8.50

stock screener

  Rating & Target

str. sell

-89%

Previous close

$79.32

 
Intrinsic value

$8.50

 
Up/down potential

-89%

 
Rating

str. sell

We calculate the intrinsic value of KEX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 4.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  3,030
  3,100
  3,180
  3,269
  3,368
  3,477
  3,596
  3,724
  3,862
  4,010
  4,169
  4,338
  4,518
  4,709
  4,912
  5,128
  5,356
  5,597
  5,851
  6,120
  6,404
  6,703
  7,018
  7,351
  7,700
  8,069
  8,457
  8,865
  9,294
  9,746
Variable operating expenses, $m
  2,780
  2,841
  2,911
  2,989
  3,076
  3,172
  3,276
  3,389
  3,510
  3,640
  3,661
  3,810
  3,968
  4,136
  4,315
  4,504
  4,704
  4,916
  5,139
  5,376
  5,625
  5,888
  6,165
  6,456
  6,764
  7,087
  7,428
  7,786
  8,164
  8,560
Fixed operating expenses, $m
  92
  94
  96
  98
  100
  103
  105
  107
  109
  112
  114
  117
  119
  122
  125
  127
  130
  133
  136
  139
  142
  145
  148
  152
  155
  158
  162
  166
  169
  173
Total operating expenses, $m
  2,872
  2,935
  3,007
  3,087
  3,176
  3,275
  3,381
  3,496
  3,619
  3,752
  3,775
  3,927
  4,087
  4,258
  4,440
  4,631
  4,834
  5,049
  5,275
  5,515
  5,767
  6,033
  6,313
  6,608
  6,919
  7,245
  7,590
  7,952
  8,333
  8,733
Operating income, $m
  159
  165
  173
  182
  192
  203
  215
  228
  243
  258
  393
  411
  430
  451
  473
  496
  521
  548
  576
  605
  637
  670
  705
  742
  782
  823
  867
  913
  961
  1,013
EBITDA, $m
  475
  486
  499
  514
  530
  548
  568
  590
  613
  639
  666
  695
  726
  759
  795
  832
  872
  914
  959
  1,006
  1,057
  1,109
  1,165
  1,224
  1,286
  1,352
  1,421
  1,494
  1,571
  1,651
Interest expense (income), $m
  20
  76
  79
  82
  86
  91
  95
  101
  106
  113
  119
  126
  134
  142
  151
  160
  170
  180
  192
  203
  215
  228
  242
  257
  272
  288
  305
  323
  341
  361
  382
Earnings before tax, $m
  83
  86
  90
  95
  101
  107
  114
  122
  130
  139
  266
  277
  288
  300
  313
  326
  341
  356
  373
  390
  408
  428
  449
  471
  494
  518
  544
  571
  600
  631
Tax expense, $m
  22
  23
  24
  26
  27
  29
  31
  33
  35
  37
  72
  75
  78
  81
  84
  88
  92
  96
  101
  105
  110
  116
  121
  127
  133
  140
  147
  154
  162
  170
Net income, $m
  60
  63
  66
  70
  74
  78
  83
  89
  95
  101
  194
  202
  210
  219
  228
  238
  249
  260
  272
  285
  298
  312
  328
  344
  360
  378
  397
  417
  438
  460

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  5,989
  6,127
  6,284
  6,461
  6,657
  6,872
  7,106
  7,359
  7,632
  7,925
  8,238
  8,573
  8,929
  9,307
  9,708
  10,134
  10,584
  11,061
  11,564
  12,095
  12,656
  13,247
  13,870
  14,527
  15,218
  15,946
  16,713
  17,519
  18,368
  19,260
Adjusted assets (=assets-cash), $m
  5,989
  6,127
  6,284
  6,461
  6,657
  6,872
  7,106
  7,359
  7,632
  7,925
  8,238
  8,573
  8,929
  9,307
  9,708
  10,134
  10,584
  11,061
  11,564
  12,095
  12,656
  13,247
  13,870
  14,527
  15,218
  15,946
  16,713
  17,519
  18,368
  19,260
Revenue / Adjusted assets
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
  0.506
Average production assets, $m
  3,912
  4,002
  4,105
  4,221
  4,349
  4,489
  4,642
  4,807
  4,986
  5,177
  5,382
  5,600
  5,833
  6,080
  6,342
  6,620
  6,914
  7,225
  7,554
  7,901
  8,267
  8,654
  9,061
  9,490
  9,941
  10,417
  10,918
  11,444
  11,999
  12,582
Working capital, $m
  491
  502
  515
  530
  546
  563
  582
  603
  626
  650
  675
  703
  732
  763
  796
  831
  868
  907
  948
  991
  1,037
  1,086
  1,137
  1,191
  1,247
  1,307
  1,370
  1,436
  1,506
  1,579
Total debt, $m
  1,465
  1,527
  1,599
  1,679
  1,767
  1,865
  1,971
  2,085
  2,209
  2,342
  2,484
  2,635
  2,796
  2,968
  3,150
  3,342
  3,546
  3,762
  3,990
  4,231
  4,485
  4,753
  5,035
  5,332
  5,646
  5,976
  6,323
  6,688
  7,072
  7,477
Total liabilities, $m
  2,713
  2,775
  2,847
  2,927
  3,016
  3,113
  3,219
  3,334
  3,457
  3,590
  3,732
  3,883
  4,045
  4,216
  4,398
  4,591
  4,795
  5,010
  5,238
  5,479
  5,733
  6,001
  6,283
  6,581
  6,894
  7,224
  7,571
  7,936
  8,321
  8,725
Total equity, $m
  3,276
  3,351
  3,437
  3,534
  3,641
  3,759
  3,887
  4,025
  4,175
  4,335
  4,506
  4,689
  4,884
  5,091
  5,311
  5,543
  5,790
  6,050
  6,325
  6,616
  6,923
  7,246
  7,587
  7,946
  8,324
  8,723
  9,142
  9,583
  10,047
  10,535
Total liabilities and equity, $m
  5,989
  6,126
  6,284
  6,461
  6,657
  6,872
  7,106
  7,359
  7,632
  7,925
  8,238
  8,572
  8,929
  9,307
  9,709
  10,134
  10,585
  11,060
  11,563
  12,095
  12,656
  13,247
  13,870
  14,527
  15,218
  15,947
  16,713
  17,519
  18,368
  19,260
Debt-to-equity ratio
  0.450
  0.460
  0.470
  0.470
  0.490
  0.500
  0.510
  0.520
  0.530
  0.540
  0.550
  0.560
  0.570
  0.580
  0.590
  0.600
  0.610
  0.620
  0.630
  0.640
  0.650
  0.660
  0.660
  0.670
  0.680
  0.690
  0.690
  0.700
  0.700
  0.710
Adjusted equity ratio
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547
  0.547

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  60
  63
  66
  70
  74
  78
  83
  89
  95
  101
  194
  202
  210
  219
  228
  238
  249
  260
  272
  285
  298
  312
  328
  344
  360
  378
  397
  417
  438
  460
Depreciation, amort., depletion, $m
  316
  321
  326
  332
  339
  346
  353
  362
  371
  381
  273
  284
  296
  309
  322
  336
  351
  367
  383
  401
  420
  439
  460
  482
  505
  529
  554
  581
  609
  639
Funds from operations, $m
  377
  384
  392
  402
  412
  424
  437
  451
  466
  482
  468
  486
  506
  527
  550
  574
  600
  627
  655
  686
  718
  752
  787
  825
  865
  907
  951
  998
  1,047
  1,099
Change in working capital, $m
  10
  11
  13
  14
  16
  18
  19
  21
  22
  24
  26
  27
  29
  31
  33
  35
  37
  39
  41
  44
  46
  48
  51
  54
  57
  60
  63
  66
  70
  73
Cash from operations, $m
  367
  373
  379
  387
  396
  406
  418
  430
  443
  458
  442
  459
  477
  496
  517
  539
  563
  588
  614
  642
  672
  703
  736
  771
  808
  847
  889
  932
  978
  1,026
Maintenance CAPEX, $m
  -195
  -199
  -203
  -208
  -214
  -221
  -228
  -236
  -244
  -253
  -263
  -273
  -284
  -296
  -309
  -322
  -336
  -351
  -367
  -383
  -401
  -420
  -439
  -460
  -482
  -505
  -529
  -554
  -581
  -609
New CAPEX, $m
  -76
  -90
  -103
  -115
  -128
  -140
  -153
  -165
  -178
  -191
  -205
  -218
  -233
  -247
  -262
  -278
  -294
  -311
  -329
  -347
  -366
  -386
  -407
  -429
  -452
  -476
  -501
  -527
  -554
  -583
Cash from investing activities, $m
  -271
  -289
  -306
  -323
  -342
  -361
  -381
  -401
  -422
  -444
  -468
  -491
  -517
  -543
  -571
  -600
  -630
  -662
  -696
  -730
  -767
  -806
  -846
  -889
  -934
  -981
  -1,030
  -1,081
  -1,135
  -1,192
Free cash flow, $m
  96
  84
  73
  63
  54
  45
  37
  29
  21
  14
  -26
  -33
  -40
  -47
  -54
  -61
  -67
  -74
  -81
  -88
  -95
  -103
  -110
  -117
  -125
  -133
  -141
  -149
  -157
  -166
Issuance/(repayment) of debt, $m
  55
  62
  71
  80
  89
  97
  106
  115
  124
  133
  142
  151
  161
  171
  182
  193
  204
  216
  228
  241
  254
  268
  282
  297
  313
  330
  347
  365
  384
  404
Issuance/(repurchase) of shares, $m
  2
  12
  20
  27
  33
  39
  45
  50
  54
  59
  0
  0
  0
  0
  0
  0
  0
  1
  3
  6
  9
  11
  13
  16
  18
  20
  22
  24
  26
  28
Cash from financing (excl. dividends), $m  
  57
  74
  91
  107
  122
  136
  151
  165
  178
  192
  142
  151
  161
  171
  182
  193
  204
  217
  231
  247
  263
  279
  295
  313
  331
  350
  369
  389
  410
  432
Total cash flow (excl. dividends), $m
  153
  159
  165
  170
  176
  182
  188
  193
  199
  205
  116
  119
  121
  125
  128
  132
  137
  142
  150
  158
  167
  176
  186
  196
  206
  217
  228
  240
  253
  266
Retained Cash Flow (-), $m
  -63
  -75
  -86
  -97
  -107
  -118
  -128
  -139
  -149
  -160
  -171
  -183
  -195
  -207
  -220
  -233
  -246
  -261
  -275
  -291
  -307
  -323
  -341
  -359
  -378
  -398
  -419
  -441
  -464
  -488
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  90
  83
  79
  74
  69
  64
  60
  55
  50
  45
  -55
  -64
  -73
  -82
  -91
  -101
  -110
  -119
  -125
  -132
  -140
  -147
  -155
  -164
  -172
  -181
  -191
  -201
  -211
  -222
Discount rate, %
  5.90
  6.20
  6.50
  6.83
  7.17
  7.53
  7.91
  8.30
  8.72
  9.15
  9.61
  10.09
  10.60
  11.13
  11.68
  12.27
  12.88
  13.52
  14.20
  14.91
  15.65
  16.44
  17.26
  18.12
  19.03
  19.98
  20.98
  22.03
  23.13
  24.29
PV of cash for distribution, $m
  85
  74
  65
  57
  49
  42
  35
  29
  23
  19
  -20
  -20
  -20
  -19
  -17
  -16
  -14
  -12
  -10
  -8
  -7
  -5
  -4
  -3
  -2
  -2
  -1
  -1
  -1
  0
Current shareholders' claim on cash, %
  99.9
  99.7
  99.3
  98.8
  98.1
  97.4
  96.6
  95.8
  94.9
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  94.0
  93.9
  93.9
  93.8
  93.7
  93.5
  93.4
  93.2
  93.1
  92.9
  92.7
  92.6

Kirby Corporation is a domestic tank barge operator, transporting bulk liquid products throughout the Mississippi River System, on the Gulf Intracoastal Waterway, coastwise along all three United States coasts and in Alaska and Hawaii. The Company, through its subsidiaries, operates in two segments: Marine Transportation and Diesel Engine Services. The Company, through its Marine Transportation segment, is a provider of marine transportation services, operating tank barges and towing vessels transporting bulk liquid products throughout the Mississippi River System, on the Gulf Intracoastal Waterway, coastwise along all three United States coasts and in Alaska and Hawaii. Its engine services segment, sells replacement parts, provides service mechanics to overhaul and repair medium-speed and high-speed diesel engines, transmissions, reduction gears, pumps and compression products, maintains facilities to rebuild component parts or entire medium-speed and high-speed diesel engines.

FINANCIAL RATIOS  of  Kirby Corporation (KEX)

Valuation Ratios
P/E Ratio 30.3
Price to Sales 2.4
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow 10.3
Price to Free Cash Flow 23.3
Growth Rates
Sales Growth Rate -17.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -33%
Cap. Spend. - 3 Yr. Gr. Rate -1.8%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 30%
Total Debt to Equity 30%
Interest Coverage 12
Management Effectiveness
Return On Assets 3.6%
Ret/ On Assets - 3 Yr. Avg. 5.7%
Return On Total Capital 4.6%
Ret/ On T. Cap. - 3 Yr. Avg. 7.3%
Return On Equity 6%
Return On Equity - 3 Yr. Avg. 9.8%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 36.4%
Gross Margin - 3 Yr. Avg. 35.6%
EBITDA Margin 25.4%
EBITDA Margin - 3 Yr. Avg. 25.7%
Operating Margin 13.9%
Oper. Margin - 3 Yr. Avg. 16.7%
Pre-Tax Margin 12.9%
Pre-Tax Margin - 3 Yr. Avg. 15.8%
Net Profit Margin 8%
Net Profit Margin - 3 Yr. Avg. 9.8%
Effective Tax Rate 37.3%
Eff/ Tax Rate - 3 Yr. Avg. 37.2%
Payout Ratio 0%

KEX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the KEX stock intrinsic value calculation we used $2971 million for the last fiscal year's total revenue generated by Kirby Corporation. The default revenue input number comes from 0001 income statement of Kirby Corporation. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our KEX stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.9%, whose default value for KEX is calculated based on our internal credit rating of Kirby Corporation, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Kirby Corporation.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of KEX stock the variable cost ratio is equal to 91.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $90 million in the base year in the intrinsic value calculation for KEX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Kirby Corporation.

Corporate tax rate of 27% is the nominal tax rate for Kirby Corporation. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the KEX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for KEX are equal to 129.1%.

Life of production assets of 19.7 years is the average useful life of capital assets used in Kirby Corporation operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for KEX is equal to 16.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3213.187 million for Kirby Corporation - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 59.851 million for Kirby Corporation is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Kirby Corporation at the current share price and the inputted number of shares is $4.7 billion.

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