KMI
Kinder Morgan, Inc.
$32.24
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 23.5% above fair value
You pay
$32.24
Bear
$20.89
Fair
$26.11
Bull
$31.34
Bear
$20.89
-35.2%
$1.43 × 12x P/E
Fair
$26.11
-19.0%
$1.43 × 15x P/E
Bull
$31.34
-2.8%
$1.43 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
22.5x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $36.67 from 34 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $26.11 per share.
Warnings
The company pays out 86% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $36.67 (from 34 analysts). Our estimate is 41% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples