Houston, Texas-based Kinder Morgan, Inc. (KMI) operates as an energy infrastructure company. Valued at $54.9 billion by market cap, the company owns and operates pipelines that transport natural gas, gasoline, crude oil, carbon dioxide, and other products, as well as terminals that store petroleum products and chemicals and handle bulk materials like coal and petroleum coke.
Shares of this midstream giant have outperformed the broader market considerably over the past year. KMI has gained 58.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 35.8%. In 2024, KMI stock is up 49.4%, surpassing the SPX’s 24.3% rise on a YTD basis.
Zooming in further, KMI’s outperformance looks more pronounced compared to the Energy Select Sector SPDR Fund (XLE). The exchange-traded fund has gained about 9.2% over the past year. Moreover, KMI’s gains on a YTD basis outshine the ETF’s 11.6% returns over the same time frame.
KMI has been performing well due to the increasing energy demands from artificial intelligence (AI) and data centers, which will require more natural gas. The company has numerous projects in development to meet the growing demand for electricity. This positive outlook on gas demand has led to higher valuations for Kinder Morgan this year.
On Oct. 16, KMI shares closed up marginally after reporting its Q3 results. Its adjusted EPS to $0.25 did not meet Wall Street expectations of $0.27. The company’s revenue stood at $3.7 billion, down 5.3% year over year. KMI expects full-year adjusted EPS to be $1.22.
For the current fiscal year, ending in December, analysts expect KMI’s EPS to grow 10.3% to $1.18 on a diluted basis. The company’s earnings surprise history is mixed. It beat or matched the consensus estimate in two of the last four quarters while missing the forecast on two other occasions.
Among the 18 analysts covering KMI stock, the consensus is a “Moderate Buy.” That’s based on six “Strong Buy” ratings, one “Moderate Buy,” and 11 “Holds.”
This configuration is more bullish than a month ago, with five analysts suggesting a “Strong Buy.”
On Nov. 4, Barclays PLC (BCS) analyst Theresa Chen kept an “Equal Weight” rating and raised the firm’s price target to $24.
While KMI currently trades above its mean price target of $25.44, the Street-high price target of $30 suggests an upside potential of 13.9%.
On the date of publication, Neha Panjwani 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.
