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Kinetik Holdings Inc. (NASDAQ:KNTK), currently trading at $44.07 with a market capitalization of $6.9 billion, recently witnessed a significant stock sale by ISQ Global Fund II GP LLC. On June 4, the fund sold 4,262,090 shares of Class A Common Stock at an average price of $44.16, resulting in a total transaction value of approximately $188.2 million. Following this sale, the fund retains ownership of just one share in the company.
The transaction was part of a broader series of financial maneuvers linked to a contribution agreement involving Kinetik Holdings and related entities. Notably, the shares were previously acquired through a conversion of Kinetik Holdings Units, which are linked to common units representing limited partnership interests in Kinetik Holdings LP. The company maintains a significant 7.1% dividend yield and has raised its dividend for three consecutive years.
The sale underscores the fund’s role as a significant shareholder in Kinetik Holdings, with affiliated entities such as I Squared Capital and ISQ Holdings also involved in the transactions. Despite the large-scale divestment, the ownership structure remains complex, with multiple entities maintaining indirect control over the sold securities. According to InvestingPro, the company maintains a "Fair" financial health score, with analysts projecting continued profitability this year.
In other recent news, Kinetik Holdings Inc. announced a new $1.6 billion revolving credit facility, which includes sublimits for letters of credit and swingline loans. This credit arrangement, maturing in 2030, is guaranteed by Kinetik Holdings Inc. and replaces previous credit facilities. Alongside this, Kinetik Holdings LP secured an additional $1.15 billion term loan credit agreement with Toronto Dominion (Texas) LLC, scheduled to mature in 2028. Kinetik’s first-quarter 2025 earnings report revealed a significant miss, with EPS at $0.05 compared to the forecast of $0.36, and revenue at $443.26 million against an expected $477.05 million.
Despite these misses, the company reported a 7% increase in adjusted EBITDA year-over-year, reaching $250 million. Analyst firms have adjusted their outlooks, with RBC Capital Markets lowering Kinetik’s stock price target to $55 due to commodity headwinds but maintaining an Outperform rating. Citi upgraded Kinetik’s stock rating from Neutral to Buy, citing growth prospects and adjusting the price target to $55. Goldman Sachs also revised the price target to $54 while retaining a Buy rating, acknowledging slightly better-than-expected gas processing and gathering margins.
Kinetik’s management confirmed its EBITDA guidance for 2025, although they anticipate achieving the lower end of the projected range due to macroeconomic factors. The company remains optimistic about a 10% compound annual growth rate in EBITDA through 2029, supported by strategic projects and cost-saving initiatives.
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