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On Friday, RBC Capital Markets adjusted its outlook on Kinetik Holdings, Inc. (NYSE: KNTK), revising the company’s price target downward to $55.00 from the previous $57.00 while retaining an Outperform rating on the stock. According to InvestingPro data, the stock currently trades at $44.58, with analyst targets ranging from $42 to $70. The adjustment follows Kinetik’s first-quarter earnings for 2025 and insights gained from the recent EIC conference.
The firm’s analyst cited commodity headwinds as a primary reason for the revision, noting that the uncertainty surrounding crude oil prices and producer activity necessitated a reassessment of Kinetik’s financial estimates. Despite these challenges, the analyst remains optimistic about Kinetik’s potential for growth in the second half of 2025, driven by the Kings Landing 1 project. The company has demonstrated strong revenue growth of 20.36% in the last twelve months and maintains a significant 6.9% dividend yield.
Kinetik Holdings, which operates in the energy sector with a focus on the Permian Basin, is still considered a strong candidate for acquisition due to its strategic asset footprint and equity NGL barrels. However, the current market’s unpredictability is seen as an obstacle to potential corporate mergers and acquisitions.
The RBC Capital Markets analyst emphasized that while the market conditions have led to a slight decrease in their estimates, the firm’s positive view of Kinetik Holdings as an Outperform-rated investment remains unchanged. The new price target of $55 reflects these updated expectations.
In other recent news, Kinetik Holdings Inc. reported first-quarter 2025 earnings that fell short of analysts’ expectations, with earnings per share (EPS) at $0.05 compared to the forecast of $0.36. Revenue also missed projections, coming in at $443.26 million against an expected $477.05 million. Despite these misses, Kinetik demonstrated resilience with a 7% year-over-year growth in adjusted EBITDA, reaching $250 million for the quarter. Citi upgraded Kinetik’s stock rating from Neutral to Buy, citing the company’s growth potential and financial strategies, although they reduced the price target from $58 to $55. Goldman Sachs also adjusted its financial outlook for Kinetik, lowering the price target to $54 from $61 but maintaining a Buy rating. The firm acknowledged that Kinetik’s first-quarter earnings were slightly better than its estimates, particularly in gas processing and gathering margins, despite not meeting broader market consensus. Analysts from both Citi and Goldman Sachs project a 10% EBITDA compound annual growth rate for Kinetik through 2029, underpinned by factors such as cost-saving initiatives and strategic expansions. Kinetik’s management remains confident in its financial strategies, highlighting minimal committed capital expenditures for 2026 and beyond, which is expected to result in a robust free cash flow yield.
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