Analyst Neal Dingmann of Truist Financial maintained a Hold rating on Kinder Morgan (KMI – Research Report), with a price target of $20.00.
Neal Dingmann has given his Hold rating due to a combination of factors concerning Kinder Morgan’s financial prospects and industry positioning. Kinder Morgan’s substantial commitment to approximately $3 billion in projects sets the stage for potential future gains, but this significant capital expenditure is expected to reduce free cash flow (FCF) in the immediate term and potentially lead to stagnation in the following year. Although Kinder Morgan’s natural gas operations have historically justified a premium market valuation compared to its peers, the gap has narrowed as competitors have improved their operations, suggesting a potential reduction in Kinder Morgan’s premium valuation going forward. Additionally, expectations for limited growth in segments other than natural gas further justify a Hold rating.
Moreover, Dingmann anticipates constrained near-term growth in shareholder returns. Kinder Morgan’s increased leverage, while still within target levels, is higher relative to its peers, implying that available FCF is likely to be channeled towards debt repayment rather than shareholder distributions. This is expected to result in lower sequential share repurchases and minimal dividend growth throughout the year. Despite the company’s disciplined approach to acquisitions that could enhance its current asset portfolio, these factors collectively contribute to a more conservative outlook on the stock’s potential performance, leading to a Hold recommendation and a lowered price target of $20.
Dingmann covers the Energy sector, focusing on stocks such as Civitas Resources, Northern Oil And Gas, and APA. According to TipRanks, Dingmann has an average return of 16.4% and a 75.76% success rate on recommended stocks.
In another report released on March 14, Barclays also assigned a Hold rating to the stock with a $20.00 price target.
TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.
Kinder Morgan (KMI) Company Description:
Texas-based Kinder Morgan, Inc. is an energy infrastructure company. The company is engaged in the operation of pipelines and terminals that transport natural gas, gasoline, crude oil, carbon dioxide (CO2) and other products. It also stores petroleum products, chemicals and handles bulk materials like ethanol, coal, petroleum coke and steel. It operates through the following segments: Natural Gas Pipelines, CO2, Terminals, and Products Pipelines.
