Kinder Morgan, Incorporated (KMI) is a North American energy infrastructure company with a market capitalization of $42.5 billion. Operating primarily in North America, it's divided into Natural Gas Pipelines, Products Pipelines, Terminals, and CO2 segments. Headquartered in Houston, Texas, Kinder Morgan is a vital player in the energy sector, facilitating the transportation and storage of natural gas, petroleum products, and CO2 for various industries.
Shares of the energy infrastructure giant have lagged behind the broader market over the past year. KMI has gained 15.5% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 27.2%.
Narrowing the focus, KMI has also underperformed the S&P 500 Energy Sector SPDR Fund (XLE). The exchange-traded fund has soared 19.3% over the past year, outshining KMI’s return for the same period.
Following its recent earnings release, Kinder Morgan's shares have surged, propelled by the company's expanding backlog of capital projects. As of the end of the first quarter, KMI’s backlog reached $3.3 billion, marking a $300 million increase from the end of 2023. In addition, the company’s high-yielding dividend continues to attract investors.
For the current fiscal year, ending in December, Street expects KMI’s EPS to increase 10.3% year over year to $1.18. The company’s earnings surprise history is mixed. It beat the consensus estimate in two of the last four quarters while missing the projections on two other occasions.
Kinder Morgan’s stock has a consensus “Moderate Buy” rating. Out of 19 analysts covering the stock, five rate it as a "Strong Buy," one suggests a "Moderate Buy," 12 say "Hold," and one advises “Moderate Sell.”
This configuration is slightly less bullish than three months before, with six analysts recommending a “Strong Buy” rating.
Recently, CFRA upgraded Kinder Morgan stock from a “Hold” to a “Buy” rating, raising its price target from $19 to $22, which implies an upside potential of 13.3%. Anticipated Q2 natural gas production drop and robust demand for transportation support the outlook. According to CFRA, Kinder Morgan is positioned as a key natural gas provider for LNG exports, with potential dividend hikes by 2025.
The mean price target of $20.38 suggests a 5% premium to KMI’s current price levels. Moreover, the Street-high target of $23 suggests an impressive upside potential of 18.5%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
