Conditions in the refining and chemical industries aren't fully back to normal, but they're trending back in that direction, with the ongoing economic recovery driving higher prices and improving capacity utilization. It's not "business as usual" again yet for Kirby (KEX), but the worst of the downturn is well behind the company and the second half of 2021 should see a more meaningful recovery.
As is usually the case, the share price has moved ahead of the reported numbers, with the shares up about 65% since my last article despite a couple more soft quarters. At this point, Kirby valuation hasn't fully gone back to pre-pandemic norms, but I expect that as soon as the company returns to beat-and-raise quarters, the sell-side will find reasons to stretch out the multiples to support higher price targets.
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Kirby's Business Needs A Little More Time, But The Stock Has Recovered
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