What to Expect From Kinder Morgan Earnings

Energy

Published: January 20, 2016 11:05 am

Last Updated: January 13, 2020 2:49 pm

Kinder Morgan Inc. (NYSE: KMI) is scheduled to report its fourth-quarter financial results after the markets close on Wednesday. The consensus estimates call for $0.18 in earnings per share (EPS) on $3.90 billion in revenue. In the same period of the previous year, it posted EPS of $0.26 and $3.95 billion in revenue.

This is one of the most recommended stocks in its field, but it has been absolutely mauled over the past year and was one of the worst-performing pipeline stocks in the S&P 500.

Kinder Morgan has completed the acquisition of Kinder Morgan Energy Partners, Kinder Morgan Management and El Paso Pipeline Partners. The merger plan was comprised of $40 billion in parent-company equity, $4 billion in cash and $27 billion in assumed debt. It was a move some shareholders were opposed to, but one many on Wall Street saw as brilliant.

In an interview last summer, Richard Kinder, the respected leader of the company, said that mergers and acquisitions could still be in store as prices have become increasingly opportunistic. He said the company wouldn’t be making any foolish buys, but that tremendous opportunity could lie in Mexico in the pipeline system there, where the company already has one pipeline.

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A few analysts weighed in on Kinder Morgan prior to its earnings release:

Jefferies has a Hold rating and a $14 price target.
Goldman Sachs reiterated a Buy rating with a $44 price target.
JPMorgan has an Overweight rating with a $24 price target.
Deutsche Bank reiterated a Buy rating with a $19 price target.
RBC Capital has a Sector Perform rating with a $19 price target.

So far in 2016, Kinder Morgan has underperformed the broad markets, with the stock down about 16% year to date. However, over the past 52 weeks the stock has done even worse, with shares down nearly 70%.

Shares of Kinder Morgan were trading down more than 9% to $11.33 on Wednesday, with a consensus analyst price target of $20.93 and a 52-week trading range of $11.20 to $44.71. That low was hit Wednesday morning.

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