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

Zacks Equity Research
DNB Financial (DNBF) delivered earnings and revenue surprises of -4.76% and 0.54%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?

Kinder Morgan (KMI) closed at $19.91 in the latest trading session, marking a +0.15% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.69%. Elsewhere, the Dow lost 0.87%, while the tech-heavy Nasdaq lost 0.79%.

Coming into today, shares of the oil and natural gas pipeline and storage company had gained 0.05% in the past month. In that same time, the Oils-Energy sector lost 6.01%, while the S&P 500 lost 4.53%.

Investors will be hoping for strength from KMI as it approaches its next earnings release. On that day, KMI is projected to report earnings of $0.23 per share, which would represent year-over-year growth of 9.52%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.62 billion, up 5.7% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.98 per share and revenue of $14.72 billion, which would represent changes of +10.11% and +4.07%, respectively, from the prior year.

Any recent changes to analyst estimates for KMI should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.13% higher. 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 20.23. Its industry sports an average Forward P/E of 19.69, so we one might conclude that KMI is trading at a premium comparatively.

It is also worth noting that KMI currently has a PEG ratio of 2.89. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Oil and Gas - Production and Pipelines was holding an average PEG ratio of 4.31 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 202, which puts it in the bottom 22% 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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