Kinder Morgan CEO to Step Down as 2023 Outlook, Q4 Results Meet Expectations

Kinder Morgan Stock at a Glance

• Current Morningstar Fair Value Estimate: $17.50
• Kinder Morgan Stock Star Rating: 3 Stars
• Economic Moat Rating: Narrow
• Moat Trend Rating: Stable

Kinder Morgan Earnings Update

Kinder Morgan’s (KMI) fourth-quarter results and 2023 outlook met our expectations. Adjusted EBITDA for 2022 was $7.5 billion compared with our $7.6 billion estimate, while the company set a 2023 expectation for $7.7 billion versus our $7.8 billion forecast. As a result, we will leave our fair value estimate and narrow moat rating unchanged.

One of the strongest areas of the business was natural gas, where volumes increased 4% from 2021, helped by liquefied natural gas demand and particularly strong performance from KinderHawk gathering assets in the Haynesville play. We expect ongoing strength here in 2023 with the Freeport LNG terminal’s return to service sometime this year.

Kinder has also made progress in developing renewable energy projects, with several renewable natural gas projects and a significant carbon capture effort (up to 400,000 tons annually) with Red Cedar, part of a joint venture between the Southern Ute Indian Tribe Growth Fund and Kinder Morgan.

Steve Kean will step down as CEO on Aug. 1 but will remain on the board of directors. Kim Dang will succeed him. Dang has been with Kinder Morgan for over 20 years, most recently serving as president but earlier in the CFO role. She emphasized continuity on the conference call, so we don’t expect any significant changes from a capital allocation standpoint in the near future.