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Kinetik Holdings Inc KNTK

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Stock XNYS Rating as of
$39.03 +0.58 (1.51%)
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As of Delayed Price Closed
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Company Report

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Kinetik: Increasing Our Fair Value Estimate Off 2023 Results and Outlook

Stephen Ellis,

After updating our model to reflect the 2023 results and refreshing commodity prices, we are increasing our Kinetik fair value estimate to $39 from $36. Our no-moat rating is unchanged. The fair value estimate increase is due to improving margins on delivered products in the midstream business and stronger-than-expected utilization. We see the cash being generated by the significant investments made over the last few years flowing into the business in 2024, driving down debt/EBITDA to 2.6 times in 2025 from 5.4 times in 2023. The EBITDA/interest expense is also improving to 6.3 times from 3.2 times over the same timeframe.

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Price vs Fair Value

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KNTK is trading at a 1% discount.
Price
$38.56
Fair Value
$17.00
Uncertainty
Medium
1-Star Price
$79.45
5-Star Price
$56.60
Economic Moat
Cjk
Capital Allocation
Vxcnrbv

Bulls Say, Bears Say

Bulls

Kinetik will benefit from increased LNG export capacity on the Gulf Coast, which will drive demand for its gas.

Bears

The lack of operator status on Kinetik’s joint venture pipelines means that the operator could make decisions that would benefit its own investments and negatively impact Kinetik’s assets.

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News

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Trading Information

Previous Close Price
$38.45
Day Range
$37.98–39.12
52-Week Range
$26.32–40.42
Bid/Ask
$38.67 / $39.41
Market Cap
$2.33 Bil
Volume/Avg
313,958 / 644,192

Key Statistics

Price/Earnings (Normalized)
6.47
Price/Sales
4.54
Dividend Yield (Trailing)
7.65%
Dividend Yield (Forward)
7.65%
Total Yield
7.90%

Company Profile

Kinetik is a midstream operator that provides gathering and processing services to gas and oil producers as well as pipeline transportation. It operates exclusively in Texas, serving the Permian Basin and connecting fields with market hubs and other large pipelines. In addition to directly operating pipelines, Kinetik also holds ownership stakes in several pipelines that transport molecules to the Gulf Coast enabling it to obtain exposure to export markets and international demand.
Sector
Energy
Industry
Oil & Gas Midstream
Stock Style Box
Small Value
Total Number of Employees
330
Website
https://www.kinetik.com

Competitors

Valuation

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Metric
KNTK
KMI
ET
Price/Earnings (Normalized)
 6.4716.9312.86
Price/Book Value
 —1.371.78
Price/Sales
 4.542.740.65
Price/Cash Flow
 9.706.655.07
Price/Earnings
KNTK
KMI
ET

Financial Strength

Metric
KNTK
KMI
ET
Quick Ratio
 0.880.330.83
Current Ratio
 1.030.501.10
Interest Coverage
 1.762.803.17
Quick Ratio
KNTK
KMI
ET

Profitability

Metric
KNTK
KMI
ET
Return on Assets (Normalized)
 7.10%3.46%5.62%
Return on Equity (Normalized)
 —7.89%21.72%
Return on Invested Capital (Normalized)
 10.02%6.00%9.25%
Return on Assets
KNTK
KMI
ET
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Oil & Gas Midstream Industry Comparables

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Economic Moat
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TRP
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LNG
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TRGP
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