Kinder Morgan's 'Core Business Is Robust Now,' BofA Upgrades Stock - Finapress

Kinder Morgan’s ‘Core Business Is Robust Now,’ BofA Upgrades Stock

BofA Securities has upgraded Kinder Morgan (NYSE:KMI), an energy infrastructure company that owns and controls oil and gas pipelines and terminals. The analyst notes stabilized base business.

The company is scheduled to report third-quarter 2024 earnings on 16 October, with analysts estimating $0.27 for adjusted EPS and $3.95 billion for revenues.

Amid uncertainty inside the energy sector, the analyst recognizes the potential in firms with contracted natural gas pipelines.

With increasing demand driven by Gulf Coast LNG projects and the electrification of utilities through AI, Kinder Morgan is positioned for long-term growth through its contracted business model.

The strength of its natural gas pipeline business, which commands a greater valuation, balances out the declines seen in lower-valued CO and product pipelines.

The analyst has upgraded from Neutral to Buy rating with a price goal of $27, up from $23.

Kinder Morgan has demonstrated its ability to offer gas to utilities, identical to Williams Firms Inc (NYSE:WMB), exemplified by the recent sanctioning of a $3 billion, 1.2 Bcf/d SNG pipeline expansion last quarter.

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BofA writes that the core business is now robust. Concerns that previously caused hesitation have been resolved, including the Supreme Court halted the Good Neighbor plan, which could have cost Kinder Morgan billions, the Double H pipeline, which represents the one significant contract roll of roughly $30 million in 2024, is transitioning to NGL service, effectively compensating for the prior contract, and up to this point acreage exchanges are revitalizing oil declines.

Kinder Morgan currently accounts for 45% of LNG deliveries, and the analyst anticipates it’s going to retain this market share.

More importantly, the rise in power demand driven by electrification and AI is predicted to contribute an additional conservative estimate of 4-5 Bcf/d of gas demand by 2030, particularly in regions served by Kinder Morgan pipelines.

Price Motion: KMI stock is up 3.56% at $24.56 ultimately check Friday.

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Latest Rankings for KMI

Date	Firm	Motion	From	To
Jan 2022	Wolfe Research	Upgrades	Underperform	Peer Perform
Jun 2021	Stifel	Downgrades	Buy	Hold
Jun 2021	Goldman Sachs	Downgrades	Neutral	Sell

View More Analyst Rankings for KMI

View the Latest Analyst Rankings

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