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

Zacks Equity Research

Kinder Morgan (KMI) closed the most recent trading day at $20.51, moving -0.29% from the previous trading session. This change lagged the S&P 500's daily gain of 0.62%. At the same time, the Dow added 0.61%, and the tech-heavy Nasdaq gained 1.05%.

Prior to today's trading, shares of the oil and natural gas pipeline and storage company had gained 2.64% over the past month. This has lagged the Oils-Energy sector's gain of 8.54% and the S&P 500's gain of 3.85% in that time.

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 $0.22 per share, which would represent year-over-year growth of 4.76%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.52 billion, unchanged from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.96 per share and revenue of $14.16 billion, which would represent changes of +7.87% and +0.08%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for KMI. These revisions help to show the ever-changing nature of 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 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.13% higher. KMI is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, KMI is currently trading at a Forward P/E ratio of 21.54. For comparison, its industry has an average Forward P/E of 16.6, which means KMI is trading at a premium to the group.

We can also see that KMI currently has a PEG ratio of 4.31. 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. Oil and Gas - Production and Pipelines stocks are, on average, holding a PEG ratio of 3.77 based on yesterday's closing prices.

The Oil and Gas - Production and Pipelines industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 150, putting it in the bottom 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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