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Kinder Morgan (KMI)
NYSE:KMI
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Kinder Morgan
(NYSE:KMI)
71Outperform
Positive Factors
Financial Performance
Free cash flow before dividend significantly exceeded expectations.
Growth Projections
KMI projects 28 Bcf/d of growth between 2024-30, higher than Wood Mac's 20 Bcf/d forecast and our estimate of 20 Bcf/d, indicating a more bullish outlook for power demand and new LNG docks.
Project Development
KMI announced FID on its Trident Intrastate Pipeline, upsized capacity on its Mississippi Crossing project, and raised its growth capex outlook to 'approximately $2.5bn' per year with its official $8.1bn project backlog (up 60% from last quarter).
Negative Factors
Bulk Transload Performance
Bulk transload tonnage was below both consensus and internal estimates.
Natural Gas Volumes
Natural gas gathering volumes had a negative impact on 4Q24 actuals, though KMI is optimistic for 2H25 activity with LNG commissioning demand.
Product Volumes
Total refined products volumes fell short of consensus expectations.
Kinder Morgan (KMI) vs. S&P 500 (SPY)
Market Cap
$58.82B
Dividend Yield4.34%
Average Volume (3M)14.07M
Price to Earnings (P/E)22.6
Beta (1Y)0.68
Revenue Growth-0.55%
EPS Growth10.02%
CountryUS
Employees10,933
SectorEnergy
Sector Strength44
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)1.17
Shares Outstanding2,222,049,600
10 Day Avg. Volume17,704,254
30 Day Avg. Volume14,068,939
Financial Highlights & Ratios
PEG Ratio2.26
Price to Book (P/B)N/A
Price to Sales (P/S)4.11
Price to Cash Flow (P/CF)10.30
P/FCF Ratio21.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$30.77Price Target Upside16.24% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Kinder Morgan Business Overview & Revenue Model
Company DescriptionKinder Morgan, Inc. is a leading energy infrastructure company in North America, operating primarily in the sectors of pipelines, terminals, and storage for natural gas, crude oil, refined petroleum products, and carbon dioxide. The company owns an extensive network of pipelines and storage facilities, making it one of the largest energy infrastructure companies on the continent. Kinder Morgan's core services include the transportation of natural gas and other energy products, as well as storage and handling services for various fuels.
How the Company Makes MoneyKinder Morgan generates revenue primarily through the transportation of natural gas, crude oil, and refined petroleum products via its vast network of pipelines. The company operates under long-term, fee-based contracts, which provide stable and predictable cash flows. Natural gas transportation is its largest revenue stream, as Kinder Morgan owns and operates significant interstate and intrastate pipelines. Additionally, the company earns money through terminal services, which involve the storage and loading of petroleum products and chemicals. Kinder Morgan also benefits from joint ventures and partnerships that enhance its infrastructure capabilities and operational reach. These partnerships often involve other major energy companies, which allows for shared resources and expanded market access.
Kinder Morgan Financial Statement Overview
Summary
Kinder Morgan presents a stable financial profile with strong profitability margins and efficient cash management. However, slight revenue decline and high leverage pose challenges. Continued focus on revenue growth and debt reduction could enhance financial resilience.Income Statement
Kinder Morgan demonstrated strong profitability with a Gross Profit Margin of 58.74% and a Net Profit Margin of 17.56% for TTM. The EBIT Margin stood at 28.80% and EBITDA Margin at 40.12%, indicating robust core operations. However, the Revenue Growth Rate of -1.42% reflects a slight decline, which could raise concerns on growth trajectory.75
Positive
Balance Sheet
The company maintains a stable financial position with a Debt-to-Equity Ratio of 1.04 and an Equity Ratio of 42.75%, suggesting moderate leverage. Return on Equity (ROE) is healthy at 8.69%. The balance between liabilities and equity indicates a solid base but leaves room for improvement in reducing debt levels.70
Positive
Cash Flow
Operating Cash Flow to Net Income Ratio is high at 2.11, showcasing strong cash conversion capabilities. However, Free Cash Flow declined by 28.34% compared to the previous year, which could indicate potential future cash constraints. The Free Cash Flow to Net Income Ratio is at 1.12, indicating efficient cash utilization.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 15.10B | 15.33B | 19.20B | 16.61B | 11.70B | Gross Profit |
| 8.41B | 7.59B | 7.76B | 7.98B | 6.99B | EBIT |
| 4.38B | 4.26B | 1.81B | 4.03B | 3.26B | EBITDA |
| 6.74B | 6.44B | 6.22B | 6.67B | 5.66B | Net Income Common Stockholders |
| 2.61B | 2.39B | 2.55B | 1.78B | 180.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 88.00M | 83.00M | 745.00M | 1.14B | 1.18B | Total Assets |
| 71.41B | 71.02B | 70.08B | 70.42B | 71.97B | Total Debt |
| 2.01B | 32.12B | 31.79B | 33.32B | 34.69B | Net Debt |
| 1.92B | 32.03B | 31.04B | 32.18B | 33.51B | Total Liabilities |
| 39.54B | 39.29B | 37.96B | 38.49B | 39.41B | Stockholders Equity |
| 30.53B | 30.31B | 30.74B | 30.82B | 31.44B |
| Cash Flow | Free Cash Flow | |||
| 3.01B | 4.15B | 3.35B | 4.43B | 2.84B | Operating Cash Flow |
| 5.63B | 6.49B | 4.97B | 5.71B | 4.55B | Investing Cash Flow |
| -2.63B | -4.17B | -2.17B | -2.31B | -911.00M | Financing Cash Flow |
| -2.89B | -3.01B | -3.15B | -3.46B | -2.64B |
Kinder Morgan Technical Analysis
Negative
26.47
Price Trends
27.03
Negative
27.35
Negative
24.55
Positive
Market Momentum
-0.34
Positive
45.41
Neutral
44.60
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KMI, the sentiment is Negative. The current price of 26.47 is below the 20-day moving average (MA) of 27.50, below the 50-day MA of 27.03, and above the 200-day MA of 24.55, indicating a neutral trend. The MACD of -0.34 indicates Positive momentum. The RSI at 45.41 is Neutral, neither overbought nor oversold. The STOCH value of 44.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KMI.
Kinder Morgan Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
85 Outperform | $49.27B | 11.45 | 31.78% | 7.50% | 4.30% | 10.45% | |
77 Outperform | $56.03B | 12.72 | 13.40% | 7.87% | 5.20% | 18.35% | |
77 Outperform | $64.17B | 11.12 | 20.78% | 7.09% | 12.71% | 6.74% | |
71 Outperform | $58.82B | 22.62 | 8.54% | 4.34% | -0.55% | 10.02% | |
71 Outperform | $68.83B | 31.04 | 17.92% | 3.41% | 8.06% | -30.11% | |
66 Neutral | $51.57B | 15.96 | 18.11% | 4.84% | 24.16% | -6.58% | |
57 Neutral | $7.57B | 4.34 | -4.83% | 6.50% | -0.19% | -64.60% |
* Energy Sector Average
Performance Comparison
KMI
Kinder Morgan
26.47
9.39
54.98%
ET
Energy Transfer
16.33
2.19
15.49%
EPD
Enterprise Products Partners
29.63
3.04
11.43%
OKE
Oneok
82.56
8.14
10.94%
WMB
Williams Co
56.39
20.02
55.05%
MPLX
MPLX
48.19
11.40
30.99%
Kinder Morgan Earnings Call Summary
Earnings Call Date: Jan 22, 2025 | % Change Since: -13.10% | Next Earnings Date: Apr 16, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance in 2024 with significant project announcements and financial growth. However, there were challenges in gathering volumes and impacts from commodity prices. The overall sentiment is positive due to the strong expansion plans and financial improvements.Highlights
Record Project Announcements
KMI announced the FID of four major projects including the GCX system expansion, SSI expansion, Mississippi crossing line, and the Triton line, entailing capital expenditures over $5 billion with a capacity to transport over 5 Bcf a day.
Strong Financial Performance in 2024
KMI grew EBITDA and EPS, improved leverage metrics, and secured commercial contracts underpinning $6.3 billion in new expansion projects.
Increased Expansion CapEx
KMI expects to spend approximately $2.5 billion per year in expansion CapEx for the next several years, up from the previous estimate of $2 billion.
Dividend Growth
KMI declared a dividend of $0.2875 per share, up 2% from 2023.
Future Growth Opportunities
KMI's internal number for growth in the natural gas business is roughly 28 Bcf a day between now and 2030, supported by their well-positioned assets.
Lowlights
Decline in Gathering Volumes
Natural gas gathering volumes were down 7% in the fourth quarter compared to the fourth quarter of 2023.
Lower Product and CO2 Volumes
The CO2 segment experienced 3% lower oil production volumes, 4% lower NGL volumes, and 3% lower CO2 volumes in the quarter versus the fourth quarter of 2023.
Impact of Commodity Prices
KMI finished 2024 a little below budget, mainly driven by commodity prices lower than what was budgeted and lower production from RNG plants.
Company Guidance
During the KMI Q4 2024 earnings call, the company provided guidance on several key metrics and projects, reflecting a strong growth trajectory. Richard Kinder highlighted the announcement of four new major projects, including the GCX system expansion, SSI expansion, Mississippi crossing line, and Triton line, which collectively entail capital expenditures exceeding $5 billion and will transport over 5 Bcf of natural gas per day. Kimberly Dang reported a successful year with $6.3 billion in new expansion projects, increasing the backlog from $3 billion to $8.1 billion, and projected an annual expansion CapEx of $2.5 billion for the coming years. The company also secured contracts to upsize the MSX project to 1.8 Bcf/day and announced the $1.7 billion Trident project. Financially, KMI declared a dividend of $0.2875 per share, with net income up 12% from the previous year, and forecasted 2025 to deliver an 8% growth in net income, 4% EBITDA growth, and a 10% increase in adjusted EPS.Kinder Morgan Corporate Events
Business Operations and Strategy
Kinder Morgan to Engage in March Investor Conferences
Neutral
Feb 28, 2025
On February 27, 2025, Kinder Morgan announced its participation in several investor meetings scheduled for early March 2025, including the Raymond James Institutional Investor Conference, Morgan Stanley Energy & Power Conference, and Barclays Investment Grade Energy & Pipeline Corporate Access Day. The company plans to discuss its business and affairs during these events, with presentation materials available online on February 28, 2025. These meetings are significant for Kinder Morgan as they provide an opportunity to engage with investors and potentially influence market perceptions and stakeholder relations.
Executive/Board Changes
Kinder Morgan Board Member Deborah Macdonald to Retire
Neutral
Feb 27, 2025
On February 24, 2025, Deborah Macdonald announced her retirement from Kinder Morgan’s Board of Directors, effective at the end of her current term, and will not seek re-election at the 2025 annual meeting. Her decision to retire is not due to any disagreement with the company, signaling a smooth transition for the board and maintaining stability in Kinder Morgan’s governance.
Business Operations and Strategy
Kinder Morgan 2025 Business Update Announcement
Neutral
Feb 5, 2025
On February 4, 2025, Kinder Morgan announced that its 2025 annual business update presentation would be available on their website by the morning of February 5, 2025. This announcement allows stakeholders to access important company updates and strategic directions, emphasizing Kinder Morgan’s commitment to transparency and communication with its investors and the market.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.