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Kinder Morgan (KMI) Gains But Lags Market: What You Should Know

Zacks Equity Research

In the latest trading session, Kinder Morgan (KMI) closed at $19.73, marking a +0.15% move from the previous day. The stock lagged the S&P 500's daily gain of 0.42%. Meanwhile, the Dow gained 0.15%, and the Nasdaq, a tech-heavy index, added 0.66%.

Heading into today, shares of the oil and natural gas pipeline and storage company had lost 2.33% over the past month, lagging the Oils-Energy sector's loss of 1.15% and the S&P 500's gain of 4.09% in that time.

KMI will be looking to display strength as it nears 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.

KMI's full-year Zacks Consensus Estimates are calling for earnings of $0.96 per share and revenue of $13.92 billion. These results would represent year-over-year changes of +7.87% and -1.56%, respectively.

Investors might also notice recent changes to analyst estimates for KMI. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.17% higher. KMI is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, KMI currently has a Forward P/E ratio of 20.45. For comparison, its industry has an average Forward P/E of 17.39, which means KMI is trading at a premium to the group.

We can also see that KMI currently has a PEG ratio of 4.09. 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 was holding an average PEG ratio of 3.55 at yesterday's closing price.

The Oil and Gas - Production and Pipelines industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 198, which puts it in the bottom 23% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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