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Kinder Morgan (KMI) Gains As Market Dips: What You Should Know

Zacks Equity Research

In the latest trading session, Kinder Morgan (KMI) closed at $20.16, marking a +0.5% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.16%. Meanwhile, the Dow lost 0.2%, and the Nasdaq, a tech-heavy index, lost 0.24%.

Coming into today, shares of the oil and natural gas pipeline and storage company had lost 1.67% in the past month. In that same time, the Oils-Energy sector gained 2%, while the S&P 500 gained 4.31%.

Investors will be hoping for strength from KMI as it approaches its next earnings release. In that report, analysts expect KMI to post earnings of $0.27 per share. This would mark year-over-year growth of 8%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.77 billion, down 0.19% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.96 per share and revenue of $13.92 billion, which would represent changes of +7.87% and -1.56%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for KMI. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.25% lower. KMI currently has a Zacks Rank of #3 (Hold).

Investors should also note KMI's current valuation metrics, including its Forward P/E ratio of 20.82. Its industry sports an average Forward P/E of 17.62, so we one might conclude that KMI is trading at a premium comparatively.

Meanwhile, KMI's PEG ratio is currently 4.16. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Oil and Gas - Production and Pipelines industry currently had an average PEG ratio of 3.48 as of yesterday's close.

The Oil and Gas - Production and Pipelines industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 207, which puts it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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