US LNG exports surge but will buyers in China turn up?
Investing.com - Mizuho (NYSE:MFG) has reduced its price target on Kinetik Holdings Inc (NYSE:KNTK) to $57.00 from $61.00 while maintaining an Outperform rating on the stock. Currently trading at $41.57, the stock sits well below the analyst consensus target range of $43-$67, according to InvestingPro data.
The midstream energy company’s shares have declined significantly, trading in the low $40s compared to mid-$60s six months ago, following OPEC+ announcements. Despite these challenges, Kinetik has maintained its EBITDA guidance for fiscal year 2025, though it expects results to trend toward the lower end of its forecast. The stock offers a substantial 7.51% dividend yield, though it trades at a relatively high P/E ratio of 43.9x.
Mizuho lowered its second-quarter EBITDA estimate for Kinetik by approximately $16 million to $236 million, citing several operational headwinds. These include sequentially lower volumes due to Alpine High production shutdowns in response to negative Waha prices, extended maintenance in the Northern Delaware region, and elevated operating expenses. For context, the company’s last twelve months EBITDA stands at $523.32 million.
The company has outlined a medium-term outlook projecting a 10% EBITDA compound annual growth rate through 2030. This growth is expected to be driven by current projects including KL1 and ECCC, along with Permian Republic contracts coming onto the system and legacy transportation and fractionation contracts rolling off.
Kinetik has begun pre-FID (Final Investment Decision) work on its KL2 project, with the company noting that the Northern Delaware region will likely require additional processing capacity by year-end 2026. Mizuho anticipates a potential KL2 final investment decision in the near future, potentially before the end of 2025. InvestingPro subscribers can access detailed growth projections and 8 additional ProTips to better evaluate Kinetik’s investment potential through our comprehensive Pro Research Report.
In other recent news, Kinetik Holdings Inc. announced the establishment of a significant $1.6 billion revolving credit facility, as disclosed in a recent SEC filing. This facility, which includes various sublimits, is set to mature in 2030 and replaces previous credit agreements terminated earlier this year. Additionally, Kinetik Holdings LP secured a $1.15 billion term loan credit agreement, maturing in 2028, with Toronto Dominion (Texas) LLC. Both financial agreements are guaranteed by Kinetik Holdings Inc. and include customary covenants and restrictions.
In other developments, Citi analysts upgraded Kinetik Holdings’ stock rating from Neutral to Buy, although they adjusted the price target to $55 from $58. The analysts anticipate a 10% EBITDA compound annual growth rate through 2029, citing several growth factors. Despite the stock rating upgrade, RBC Capital Markets revised Kinetik’s price target down to $55 from $57, maintaining an Outperform rating. The revision was influenced by commodity headwinds and uncertainties in crude oil prices.
Furthermore, Anne Psencik, Kinetik Holdings’ chief strategy officer, retired and entered a consulting agreement with the company. Ms. Psencik will provide consulting services until 2028, receiving annual compensation and potential discretionary payments. The agreement allows her to vest in outstanding equity awards during the consulting period. Meanwhile, Citi analysts highlighted short-term market challenges related to Kinetik’s Durango acquisition but expressed confidence in the company’s long-term potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.