Analyst Note| Stephen Ellis |
Kinder Morgan’s third-quarter results were solid, and the company reaffirmed its 2021 adjusted EBITDA guidance of $7.9 billion. We maintain our fair value estimate and no-moat rating while incorporating these results into our model. Kinder’s most important segment, natural gas pipelines, generated flat results, as growth from LNG-related demand and the startup of the Permian Highway was offset by weakness elsewhere, including the Fayetteville Express pipeline. However, we expect more growth in 2022 as U.S. LNG export capacity expands because Kinder currently handles about 50% of U.S. LNG transportation volumes.