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Half of Surveyed Analysts Rated Kinder Morgan a ‘Hold’

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Analyst recommendations

Of the analysts surveyed by Reuters, 50% rated Kinder Morgan (KMI) a “hold.” The remaining 50% rated the stock a “buy.” The consensus price target for KMI in a year is $22. Its stock is currently trading at $19.57. If KMI achieves its price target, it would imply 12% price returns in a year.

The above chart shows how analysts’ recommendations and mean price target for KMI changed over the last 12 months. 96% of analysts rated Enterprise Products Partners (EPD) a “buy,” 74% rated Energy Transfer Equity (ETE) a “buy,” and 76% rated Williams Companies (WMB) a “buy.”

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2018 outlook

Kinder Morgan plans to increase quarterly dividends by 60% to $0.2 per share in 2018. As for distributable cash flow, the company expects it to rise ~2% to $4.6 billion in 2018. KMI expects adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of ~$7.5 billion in 2018. The company expects to spend $2.2 billion on growth projects in 2018. As for leverage, KMI expects to end 2018 with a net debt-to-adjusted-EBITDA ratio of ~5.1x.

Kinder Morgan had earlier announced a $2 billion share buyback program. The program began in December 2017 and KMI repurchased ~14 million shares in December. The company plans to continue buying back shares in 2018.

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