We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Hold Strategy is Apt for Kinder Morgan (KMI) Stock
Read MoreHide Full Article
Kinder Morgan, Inc. (KMI - Free Report) has seen upward earnings estimate revisions for 2023 and 2024 in the past 30 days.
The stock, currently carrying a Zacks Rank #3 (Hold), has gained 4.6% in the past six months compared with 4.2% growth of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
What’s Favoring the Stock?
Kinder Morgan, as a prominent player in North America midstream energy, boasts the continent's most extensive natural gas transportation network. With a vast network of natural gas pipelines covering approximately 70,000 miles, the company plays a crucial role in moving 40% of the United States' natural gas consumption and export volumes.
KMI generates stable, fee-based revenues from its extensive midstream infrastructure network. Kinder Morgan's business model is relatively less exposed to commodity price volatility than upstream and downstream companies. It generates a substantial cash flow by charging fees for the use of its midstream assets.
For 2023, the midstream company anticipates earnings of $1.12 per share. Kinder Morgan (KMI - Free Report) expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $7.7 billion for 2023, showing growth from the $7.5 billion reported in 2022.
To fortify its balance sheet, Kinder Morgan intends to achieve a net-debt-to-adjusted-EBITDA ratio of 4 times by the end of 2023. This strategy aims to bring the ratio for 2023 below its long-term target of 4.5 times. This approach will provide the company with considerable flexibility, enabling it to consider opportunistic share repurchases or further investments.
Risks
Kinder Morgan's project backlogs have seen a substantial decline, standing at $3.7 billion as of Jun 30, 2023, compared with the peak of $22 billion in mid-2015. This reduction in project backlog is primarily attributed to the uncertainties in the energy markets, which are expected to result in lower asset utilization and volumes. Consequently, the significant decrease in project backlog is likely to have a negative impact on the company's financial performance.
USA Compression Partners, LP (USAC - Free Report) is one of the largest independent natural gas compression service providers across the United States in terms of fleet horsepower.
USA Compression Partners has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for USAC’s 2023 and 2024 earnings per share is pegged at 30 cents and 58 cents, respectively.
Enerplus Corporation (ERF - Free Report) is an independent oil and gas production company with resources across Western Canada and the United States.
Enerplus has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for ERF’s 2023 and 2024 earnings per share is pegged at $2.26 and $2.66, respectively.
Global Partners (GLP - Free Report) is a leading operator of gasoline stations and convenience stores. Over the past 60 days, GLP has witnessed upward earnings estimate revisions for 2023 and 2024, respectively.
The Zacks Consensus Estimate for Global Partners’ 2023 and 2024 earnings per share is pegged at $3.46 and $3.69, respectively. GLP currently has a Zacks Style Score of A for Value and Growth.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Here's Why Hold Strategy is Apt for Kinder Morgan (KMI) Stock
Kinder Morgan, Inc. (KMI - Free Report) has seen upward earnings estimate revisions for 2023 and 2024 in the past 30 days.
The stock, currently carrying a Zacks Rank #3 (Hold), has gained 4.6% in the past six months compared with 4.2% growth of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
What’s Favoring the Stock?
Kinder Morgan, as a prominent player in North America midstream energy, boasts the continent's most extensive natural gas transportation network. With a vast network of natural gas pipelines covering approximately 70,000 miles, the company plays a crucial role in moving 40% of the United States' natural gas consumption and export volumes.
KMI generates stable, fee-based revenues from its extensive midstream infrastructure network. Kinder Morgan's business model is relatively less exposed to commodity price volatility than upstream and downstream companies. It generates a substantial cash flow by charging fees for the use of its midstream assets.
For 2023, the midstream company anticipates earnings of $1.12 per share. Kinder Morgan (KMI - Free Report) expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $7.7 billion for 2023, showing growth from the $7.5 billion reported in 2022.
To fortify its balance sheet, Kinder Morgan intends to achieve a net-debt-to-adjusted-EBITDA ratio of 4 times by the end of 2023. This strategy aims to bring the ratio for 2023 below its long-term target of 4.5 times. This approach will provide the company with considerable flexibility, enabling it to consider opportunistic share repurchases or further investments.
Risks
Kinder Morgan's project backlogs have seen a substantial decline, standing at $3.7 billion as of Jun 30, 2023, compared with the peak of $22 billion in mid-2015. This reduction in project backlog is primarily attributed to the uncertainties in the energy markets, which are expected to result in lower asset utilization and volumes. Consequently, the significant decrease in project backlog is likely to have a negative impact on the company's financial performance.
Stocks to Consider
Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
USA Compression Partners, LP (USAC - Free Report) is one of the largest independent natural gas compression service providers across the United States in terms of fleet horsepower.
USA Compression Partners has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for USAC’s 2023 and 2024 earnings per share is pegged at 30 cents and 58 cents, respectively.
Enerplus Corporation (ERF - Free Report) is an independent oil and gas production company with resources across Western Canada and the United States.
Enerplus has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for ERF’s 2023 and 2024 earnings per share is pegged at $2.26 and $2.66, respectively.
Global Partners (GLP - Free Report) is a leading operator of gasoline stations and convenience stores. Over the past 60 days, GLP has witnessed upward earnings estimate revisions for 2023 and 2024, respectively.
The Zacks Consensus Estimate for Global Partners’ 2023 and 2024 earnings per share is pegged at $3.46 and $3.69, respectively. GLP currently has a Zacks Style Score of A for Value and Growth.