BofA Securities upgraded Kinder Morgan (NYSE:KMI), an energy infrastructure company that owns and manages oil and gas pipelines and terminals. Analysts point out that the base business has stabilized.
The company is scheduled to report third-quarter 2024 earnings on October 16, with analysts estimating adjusted EPS of $0.27 and revenue of $3.95 billion.
Amid uncertainty in the energy sector, analysts see potential for companies with contracted natural gas pipelines.
Kinder Morgan is poised for long-term growth through its contract business model as demand increases from Gulf Coast LNG projects and AI-powered utility electrification.
The strength of our higher valued natural gas pipeline business is offsetting the decline seen in our lower valued carbon and product pipelines.
The analyst upgraded his investment rating from “neutral” to “buy” and raised his price target from $23 to $27.
Kinder Morgan, like Williams Companies (NYSE:WMB), has demonstrated the ability to supply gas to utilities, including $3 billion and 1.2 Bcf/d of SNG in the last quarter. One example is the recent sanctions against pipeline expansion.
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BofA wrote that its core business is currently strong. Supreme Court blocks Good Neighbor project that could cost Kinder Morgan billions of dollars; Double H pipeline, with only significant approximately $30 million contract roll in 2024, becomes NGL Concerns that had previously caused hesitation, such as transitioning to The recent exchange of acreage for services that effectively supplement previous contracts has once again accelerated the decline in oil prices.
Kinder Morgan currently accounts for 45% of LNG shipments, and analysts expect it to maintain this market share.
More importantly, increasing power demand from electrification and AI will push gas demand to 4-5 Bcf per day by 2030, a conservative estimate, especially in regions served by the Kinder Morgan pipeline. This is expected to be added.
Price Action: KMI stock was up 3.56% at $24.56 at last check on Friday.
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The article Kinder Morgan’s ‘Core Business Is Strong Now’, BofA Upgrades Stock, originally appeared on Benzinga.com.
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