Analyst Note| Stephen Ellis |
Kinder’s 2022 guidance looks solid with consistent growth, excluding winter storm Uri impacts, in our view. The guidance is largely consistent with our own forecasts, and we don’t expect to make material changes to our fair value estimate or narrow moat rating. Adjusted EBITDA is expected to be $7.2 billion, up 5% from 2021 excluding Uri. The main drivers of the improved performance are a full year of Stagecoach earnings, project completions in the fourth quarter of 2021, and a healthy oil and gas price environment. With growth capital spending targeted at $1.3 billion, there’s ample scope for deleveraging and buybacks. Leverage is expected to reach 4.3 times by the end of the year, and incremental share buybacks of up to $750 million could be made on an opportunistic basis.