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On Tuesday, UBS initiated coverage on Kinetik Holdings, Inc. (NYSE:KNTK) with a Neutral rating and a $49.00 price target. According to InvestingPro data, analyst targets for the stock range from $42 to $70, with the company currently trading at $43.44. The stock has seen a significant decline of 21% year-to-date, though it maintains a substantial 7.18% dividend yield. Kinetik Holdings, an integrated midstream energy company operating in the Permian Basin, is expected to see its 2025 earnings increase by approximately 14.5% compared to 2024. This growth projection is attributed to several key developments including the full-year impact of the Durango acquisition completed in mid-2024, the recent acquisition of Barilla Draw assets from Permian Resources in January 2025, and the anticipated startup of the Kings Landing complex in the second quarter of 2025. The Kings Landing facility is set to add 220 million cubic feet per day, effectively doubling the capacity of Delaware North and contributing an additional $75 million in annual EBITDA. InvestingPro analysis shows the company’s current EBITDA stands at $515.28 million, with a robust revenue growth of 18.03% over the last twelve months.
Despite these positive developments, UBS expressed concerns regarding the medium to longer-term growth prospects for Kinetik Holdings. The firm pointed to potential challenges stemming from weaker crude and natural gas liquids (NGL) prices, which could be impacted by OPEC’s decision to increase production volumes and the effect of tariffs on NGL export economics. Moreover, a declining rig count in the Permian Basin suggests that investors should exercise caution regarding the volume growth narrative in the region.
UBS’s EBITDA estimates for Kinetik Holdings align with the consensus on Wall Street. The firm’s neutral stance reflects a balanced view of the company’s near-term growth potential against the backdrop of broader market uncertainties. Kinetik Holdings provides a range of services in the energy sector, including gathering, transportation, compression, processing, and treating, all essential to the industry’s infrastructure.
In other recent news, Kinetik Holdings Inc. reported several key developments. RBC Capital Markets adjusted its price target for Kinetik Holdings from $67.00 to $63.00 while maintaining an Outperform rating, highlighting the company’s strong position in the Permian Basin and potential for growth. Citi analysts reiterated a Neutral rating on Kinetik, projecting that its first-quarter EBITDA might fall short of market expectations, with a forecast of $251 million compared to the consensus estimate of $261 million. Kinetik Holdings also announced the pricing of a $250 million sustainability-linked senior notes offering, with the proceeds intended for general corporate purposes, including debt repayment. Additionally, the company expanded its credit facility to $250 million and extended its maturity to March 31, 2026, providing more financial flexibility. In corporate governance news, board member Jesse Krynak resigned, citing no disagreements with the company’s operations or policies. These developments reflect Kinetik’s ongoing strategic adjustments and financial maneuvers in the energy sector.
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