Kinder Morgan Inc. (KMI): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


We are downgrading our recommendation to Underperform from Neutral on Kinder Morgan Inc, following its lower-than-expected third quarter results. The company's focus on natural gas has raised concern amid a sluggish natural gas price environment. We also remain bearish considering the risks that include a decrease in crude oil production and pricing at the CO2 segment, a decline in refined products or natural gas demand, and rising costs associated with organic growth projects. Also in the near-term performance would be affected by dropdown of interest in Ruby Pipeline, Gulf LNG and in Young Gas Storage. Finally even with its diversified set of assets, Kinder Morgan has little exposure to the shale oil infrastructure. Its most exceptionally placed oil asset infrastructure is Transmountain.


Texas-based Kinder Morgan, Inc., (KMI) is one of the largest midstream energy companies in North America, operating approximately 80,000 miles of pipelines transmitting natural gas, refined petroleum products, crude oil, carbon dioxide and additional products. It has more than 180 terminals that store petroleum products and chemicals, as well as ethanol, coal, petroleum coke and steel.

KMI owns the general partner (GP) interest and incentive distribution rights (IDRs) of Kinder Morgan Energy Partners, L.P. (KMP) and El Paso Pipeline Partners, L.P. (EPB). The company also owns limited partner units of KMP, Kinder Morgan Management, LLC (KMR) and EPB. KMP is considered to be one of the leading publicly traded pipeline limited partnerships in America.

The company's reportable business segments comprise KMP's first five segments as well as NGPL PipeCo LLC. These include:

KMP - Products Pipelines, Natural Gas Pipelines, CO2, Terminals, Kinder Morgan Canada

NGPL PipeCo LLC - KMI holds 20% equity interest in NGPL PipeCo LLC that is considered to be a major interstate natural gas pipeline and storage system.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Stocks

Referenced Stocks: EPB , KMI , KMP , KMR

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