Revenue Miss: Kinder Morgan, Inc. Fell 14% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

The analysts might have been a bit too bullish on Kinder Morgan, Inc. (NYSE:KMI), given that the company fell short of expectations when it released its quarterly results last week. Kinder Morgan reported an earnings miss, with US$3.8b revenues falling 14% short of analyst models, and statutory earnings per share (EPS) of US$0.33 also coming in slightly below expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Kinder Morgan after the latest results.

See our latest analysis for Kinder Morgan

After the latest results, the eleven analysts covering Kinder Morgan are now predicting revenues of US$17.3b in 2024. If met, this would reflect a decent 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 13% to US$1.24. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$17.7b and earnings per share (EPS) of US$1.26 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The consensus has reconfirmed its price target of US$20.42, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Kinder Morgan's market value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Kinder Morgan at US$22.00 per share, while the most bearish prices it at US$18.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Kinder Morgan's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 6.6% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Kinder Morgan to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at US$20.42, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Kinder Morgan analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Kinder Morgan that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.