Since Kinder Morgan, Inc. (NYSE:KMI) released its earnings in June 2019, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 4.9% in the upcoming year relative to the past 5-year average growth rate of -0.7%. Presently, with latest-twelve-month earnings at US$1.5b, we should see this growing to US$1.5b by 2020. Below is a brief commentary on the longer term outlook the market has for Kinder Morgan. Investors wanting to learn more about other aspects of the company should research its fundamentals here.
How will Kinder Morgan perform in the near future?
The longer term expectations from the 13 analysts of KMI is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for KMI, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
From the current net income level of US$1.5b and the final forecast of US$1.6b by 2022, the annual rate of growth for KMI’s earnings is 1.2%. EPS reaches $1.09 in the final year of forecast compared to the current $0.66 EPS today. Analysts are predicting this high revenue growth to squeeze profit margins over time, from 10% to 10% by the end of 2022.
Future outlook is only one aspect when you're building an investment case for a stock. For Kinder Morgan, I've compiled three key factors you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Kinder Morgan worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Kinder Morgan is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Kinder Morgan? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.