In a report released today, Robert Kad from Morgan Stanley maintained a Sell rating on World Kinect, with a price target of $27.00.
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Robert Kad has given his Sell rating due to a combination of factors impacting World Kinect’s financial performance. The company’s Aviation segment showed growth, benefiting from increased profit contributions at European airport locations and higher government sales. However, the Land and Marine segments experienced declines. The Land segment’s downturn was attributed to unfavorable market conditions and the impact of divesting from UK and Brazil operations, as well as exiting certain North American operations. The Marine segment faced challenges due to lower bunker fuel prices and reduced market volatility, leading to decreased profit contributions.
Additionally, the financial metrics indicate some concerns. Despite a significant increase in free cash flow before dividends, the free cash flow after dividends showed a substantial decrease. The company’s net debt to EBITDA ratio also suggests potential leverage concerns, which may affect its financial stability. These factors combined have led Robert Kad to recommend a Sell rating for World Kinect’s stock.