Market Experts Bullish on Kinder Morgan’s Growth Trajectory

Kinder Morgan US49456B1017

UBS has issued a strong endorsement of U.S. pipeline operator Kinder Morgan, citing robust core business performance and an optimistic outlook for the coming year. The investment bank recently reaffirmed its "Buy" rating on the company's shares, establishing a price target of $38.00. This target suggests an approximate 42% upside from the current trading level near $27.

Analysts at the firm pointed to better-than-anticipated results from the natural gas pipeline segment as a key driver. Consequently, they have revised their EBITDA estimate for the fourth quarter of 2025 upward to $2.226 billion, a figure that exceeds broader market expectations.

The company itself has released preliminary financial guidance for 2026, projecting roughly 4% growth in adjusted EBITDA and an 8% increase in adjusted earnings per share (EPS) compared to its 2025 forecast. A significant point for income-focused investors is the planned dividend: management anticipates raising it to $1.19 per share annually in 2026. This would mark the ninth consecutive year of dividend growth. Additionally, Kinder Morgan plans to substantially boost its capital investment spending to around $3.4 billion.

UBS attributes its positive revision to favorable cold weather patterns and sustained strong demand for liquefied natural gas (LNG). These elements are providing momentum for the core business, even as persistent softness in certain commodity prices acts as a partial offset.

Diverging Analyst Perspectives

While UBS presents a clear buy thesis, the view across other research firms is more varied. Mizuho maintains an "Outperform" rating but slightly reduced its price target to $31. Stifel Nicolaus and the Royal Bank of Canada both nudged their targets higher to $30, accompanying them with "Hold" and "Sector Perform" ratings, respectively. According to data from MarketBeat.com, the consensus rating among covering analysts is "Moderate Buy," with an average price target of $31.33.

LNG Demand: A Core Growth Engine

The outlook for natural gas demand remains a pivotal factor for Kinder Morgan's business. The firm is benefiting from rising LNG exports and growing power consumption, partly fueled by data center expansion. Long-term contracts currently secure the transport of 8 billion cubic feet of gas per day to LNG terminals, with plans to increase this volume to 12 billion cubic feet by 2028.

The company's most recent quarterly report for Q3 2025 showed EPS of $0.29, slightly below expectations. However, revenue of $4.15 billion significantly surpassed estimates of $3.98 billion, highlighting the firm's capacity for substantial top-line growth. The market awaits the next quarterly results, scheduled for January 2026, for further insight into the progress of strategic growth initiatives.