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On Friday, Goldman Sachs reiterated their Buy rating on Kinder Morgan (NYSE:KMI) shares with a $31.00 price target, as the stock trades at $28.23. The firm’s analyst highlighted the potential for a stronger performance in the base business due to higher gas prices and colder weather. According to InvestingPro data, analyst targets for the stock range from $22 to $38, with 4 analysts recently revising their earnings estimates upward. The focus for the upcoming first quarter 2025 earnings includes several key areas: improved base business results, updates on the gas project pipeline, backlog opportunities in relation to balance sheet capacity, and insights into corporate EBITDA growth prospects.
Goldman Sachs expects Kinder Morgan’s first-quarter EBITDA to reach $2,183 million, surpassing the consensus estimate of $2,139 million by 2% and the company’s own guidance of $2,170 million by 0.5%. For context, InvestingPro shows the company’s trailing twelve-month EBITDA at $6.63 billion, with the next earnings report scheduled for April 16, 2025. This optimistic forecast is largely attributed to tailwinds from commodity prices. The firm anticipates contributions from new gas projects, the Outrigger acquisition, gas price tailwinds, and ramping renewable natural gas (RNG) production to be the major quarter-over-quarter drivers. However, these are expected to be partially offset by weaker performance in the Terminals segment due to refinery shutdowns and softer D3 RIN pricing.
Goldman Sachs’ continued endorsement of Kinder Morgan is based on the expectation that the company will perform well against its guidance, following several quarters that fell short of expectations. The analyst notes that Kinder Morgan is well-positioned to benefit from further upside driven by gas projects.
In terms of valuation, Goldman Sachs has maintained their $31 price target, which is now based on 11.75 times the projected 2026 earnings, implying a multiple of 11.0 times for 2028. The firm’s sustained Buy rating reflects their confidence in Kinder Morgan’s ability to capitalize on its opportunities and deliver growth. Currently trading with a P/E ratio of 24.09, InvestingPro analysis suggests the stock is slightly overvalued relative to its Fair Value. InvestingPro subscribers have access to 12 additional key insights about Kinder Morgan, including detailed valuation metrics and comprehensive financial health scores.
In other recent news, Kinder Morgan has been in the spotlight with several notable developments. RBC Capital Markets increased its price target for Kinder Morgan to $27, citing a positive trajectory despite slightly lower-than-expected fourth-quarter earnings for 2024. Barclays (LON:BARC) upgraded Kinder Morgan’s stock rating to Overweight, setting a new price target of $31, highlighting the company’s potential to benefit from the growing demand for natural gas. In addition, S&P Global revised Kinder Morgan’s outlook to positive, affirming its ratings due to the company’s strong balance sheet and strategic growth in its natural gas franchise.
Kinder Morgan also shared its 2025 business plan, projecting continued growth with a focus on its extensive natural gas infrastructure. The company reported a significant increase in its project backlog, driven by demand for natural gas, and emphasized its strong cash flow generation capabilities. Citi, meanwhile, maintained a Neutral rating on Kinder Morgan, acknowledging the company’s stable position despite challenges such as tenant bankruptcies and store closures. Kinder Morgan’s strategic initiatives, including its Energy Transition Ventures group, further underscore its commitment to long-term growth and adaptation to energy transition opportunities.
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