Kinder Morgan (KMI): Raising PT After Non Deal Roadshow - UBS

September 12, 2016 8:15 AM EDT
Get Alerts KMI Hot Sheet
Price: $21.36 -0.6%

Rating Summary:
    17 Buy, 5 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 11 | Down: 31 | New: 42
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UBS analyst, Shneur Gershuni reiterated his Buy rating on shares of Kinder Morgan (NYSE: KMI) and raised the price target to $27 after travelling with KMI to meet with investors in Europe. With 2015 and credit concerns mostly in the rear view mirror, investors were looking for color on the outlook for a return of capital through dividends or share buybacks.

In terms of dividend coverage level, no guidance was provided; however, we got the sense that going forward as a funding strategy KMI would like to fund the equity portion of its capex backlog through retained DCF. If we assume an annual capex budget of $4B that would translate into $2B in retained DCF or a coverage ratio of 1.5x based on 2020E which would be a big step-down from current coverage levels of 4.0x.

As far as asset sales go, KMI does not see itself as a JV seller of existing assets outside of the unique circumstances with SNG.

The PT increases to $27 from $24.

(from $24.00)

For an analyst ratings summary and ratings history on Kinder Morgan click here. For more ratings news on Kinder Morgan click here.

Shares of Kinder Morgan closed at $22.12 yesterday.



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