U.S. stock futures slip lower; Cook’s firing increases Fed independence worries
On Friday, Mizuho (NYSE:MFG) Securities showed confidence in Kinetik Holdings, Inc. (NYSE:KNTK) by increasing the company’s price target from $64.00 to $70.00, while reiterating an Outperform rating on the stock. Currently trading at $65.79 with a market capitalization of $3.93 billion, Kinetik offers a notable 4.74% dividend yield. According to InvestingPro analysis, the stock appears to be trading near its Fair Value. The adjustment reflects the firm’s belief in the company’s growth prospects, which appear to be robust compared to its Midstream sector peers.
Analysts at Mizuho highlighted Kinetik Holdings’ growth outlook as a key advantage, noting that it is less reliant on the AI/data center narrative, which can be subject to market fluctuations. The company has demonstrated strong performance with revenue growth of 20.2% over the last twelve months. The company’s strategic bolt-on transactions in the Northern Delaware region are seen as crucial steps that will help Kinetik achieve its adjusted EBITDA Compound Annual Growth Rate (CAGR) soft target of 10-12% through the fiscal year 2027. InvestingPro subscribers can access 14 additional key insights about Kinetik’s financial health and growth prospects.
The firm’s assessment of Kinetik’s adjusted EBITDA growth is based on the company’s performance, excluding potential major sources of uplift, such as Natural Gas Liquids (NGL) pipeline recontracting expected in the fiscal years 2027 and 2028. Mizuho analysts argue that even without these additional sources of income, Kinetik’s equity may be undervalued, especially considering the re-rate in the fiscal year 2024.
The Outperform rating is supported by the belief that the current Enterprise Value to EBITDA (EV/EBITDA) multiple of 10.3 times EV/’27 EBITDA may not fully reflect the company’s growth potential. The analysts have reiterated their positive stance on Kinetik Holdings and have raised their estimates, leading to the new price target of $70. This move by Mizuho indicates a favorable outlook for Kinetik Holdings, as the company continues to strengthen its position in the Midstream sector.
In other recent news, Kinetik Holdings Inc. reported significant developments. The company announced robust Q3 results, with a record adjusted EBITDA of $266 million, reflecting a 23% increase year-over-year. Kinetik also processed 1.71 billion cubic feet of gas per day, marking a 15% increase from the previous year. Additionally, the company acquired a 27.5% equity interest in EPIC Crude and solidified a long-term partnership with Diamondback (NASDAQ:FANG) Energy.
Kinetik also underwent board changes with the resignation of Elizabeth Cordia and the appointment of Karen Putterman by Blackstone (NYSE:BX) Energy Partners II L.P. The company anticipates a return of Alpine High volumes by December 2024, driven by positive pricing dynamics. Kinetik remains focused on balancing organic growth with shareholder returns through dividends and share repurchases. These are just a few of the recent developments that have been reported by the company.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.