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

Zacks Equity Research
Updated
Wall Street finished in the green reversing its five-day negative trend on Thursday following news that United States and China have ramped up their efforts to resolve lingering trade disputes

In the latest trading session, Kinder Morgan (KMI) closed at $17.15, marking a +1.24% move from the previous day. The stock outpaced the S&P 500's daily gain of 1.06%. At the same time, the Dow added 0.83%, and the tech-heavy Nasdaq gained 1.72%.

Heading into today, shares of the oil and natural gas pipeline and storage company had lost 5.63% over the past month, outpacing the Oils-Energy sector's loss of 9.12% and lagging the S&P 500's loss of 2.09% in that time.

Wall Street will be looking for positivity from KMI as it approaches its next earnings report date. This is expected to be January 16, 2019. On that day, KMI is projected to report earnings of $0.24 per share, which would represent year-over-year growth of 14.29%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.06 billion, up 11.8% from the year-ago period.

KMI's full-year Zacks Consensus Estimates are calling for earnings of $0.87 per share and revenue of $14.36 billion. These results would represent year-over-year changes of +31.82% and +4.77%, respectively.

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. Within the past 30 days, our consensus EPS projection has moved 0.83% higher. KMI is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, KMI is holding a Forward P/E ratio of 19.51. This represents a premium compared to its industry's average Forward P/E of 16.84.

We can also see that KMI currently has a PEG ratio of 2.3. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Oil and Gas - Production and Pipelines was holding an average PEG ratio of 2.79 at yesterday's closing price.

The Oil and Gas - Production and Pipelines industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 103, putting it in the top 40% 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.

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


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