Freedom raised its rating on Kinder Morgan to “Buy” with a $39 target price

Rising gas deliveries and an expanding portfolio of infrastructure projects are improving the outlook for Kinder Morgan (NYSE: KMI), according to Freedom Broker analysts Sergey Pigarev and Akmaral Burkutova. Following the company’s Q3 results, they raised their target price for the stock from $34 to $39 and upgraded the recommendation from “Hold” to “Buy.” The new target implies upside potential of about 14.8% versus the price of $33.97 cited in the report dated October 22.

Kinder Morgan operates pipelines, terminals, and storage facilities for energy commodities in North America. The company transports natural gas, crude oil, and refined products, connecting producers with industrial consumers and export infrastructure.

Revenue and profit beat expectations

According to the Q3 2026 report, Kinder Morgan’s revenue totaled about $4.5 billion. By Freedom’s calculations, it rose 9.3% year over year and exceeded the consensus forecast by 3.6%.

Adjusted earnings per share reached $0.35 versus the expected $0.32, a beat of 9.4%. Adjusted net income came in close to $0.8 billion.

The results were supported by increased gas transportation to liquefied natural gas plants and higher demand for pipeline system services within Texas. Natural gas transport volumes rose 3.8% year over year.

Two major projects expanded long-term growth opportunities

Kinder Morgan made final investment decisions on two pipeline projects, Southeast Connector and Permian Link. Both are backed by long-term agreements under which customers are obligated to pay for contracted capacity regardless of actual use.

Southeast Connector is intended to serve growing demand in the southeastern United States. Permian Link is expected to supply gas to new power-generation capacity for a major operator of computing infrastructure. Both projects are expected to come online in 2030.

The expansion project backlog reached $14.4 billion. For Freedom, this increases the predictability of future business growth, although the main financial impact from the new large assets will materialize in a few years.

Full-year profit may significantly exceed the original plan

Management kept its formal full-year guidance for adjusted earnings per share at $1.36, but now expects to beat it by more than 13%. The company also expects adjusted EBITDA to come in more than 6% above the original budget.

EBITDA reflects earnings before interest, taxes, and depreciation. The expected outperformance versus full-year targets was one of the reasons for the more positive valuation of the shares.

Infrastructure expansion requires higher investment

Kinder Morgan’s capital expenditures in Q3 rose 31.8% year over year to roughly $1 billion. Over nine months, the company allocated about $2.8 billion to investments.

Management expects spending on business expansion over the next few years to be about $4 billion annually. As of the end of September, net debt reached $32.2 billion, up $0.2 billion over the quarter.

Thus, new projects lay the groundwork for future revenue, but require significant capital outlays before start-up. For investors, it is important to monitor construction timelines, project cost control, and leverage.

Kinder Morgan expands infrastructure for different markets

Previously, Freedom Broker reported on the Western Gateway project, which Kinder Morgan is developing jointly with Phillips 66. It предусматривает transportation of fuel from Texas to Arizona and California.

The new gas pipeline projects expand the company’s investment program in a different direction—meeting demand from power generation and computing infrastructure. Improved profit guidance and a growing project portfolio support Freedom’s positive view on the stock.

This is not an individual investment recommendation.