Kinder Morgan, Inc.

(New York Stock Exchange)
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Bullish +72

Jim Cramer Says Kinder Morgan (KMI) Stock Shouldn’t Have Fallen This Far - Yahoo Finance

Financial outlook AI-generated analysis

📈 Jim Cramer explicitly stated he is a buyer of Kinder Morgan (KMI) stock, describing it as undervalued at 19 times earnings.

💰 Kinder Morgan reported record second-quarter net income of $867 million, a significant increase from the prior-year quarter.

📊 Adjusted EBITDA reached a record $2.2 billion in Q2, marking a 12% year-over-year growth driven by infrastructure demand.

🚀 Adjusted earnings per share increased 32% to $0.37 during the second quarter of the reporting period.

🏗️ The company ended the quarter with a massive project backlog of $9.6 billion, primarily focused on natural gas projects.

⚡ Over 60% of the project backlog is associated with power generation and local distribution company demand.

🔮 Management expects 2026 adjusted EBITDA to be more than 5% above its original budget targets.

💸 The company projects year-end net debt-to-adjusted EBITDA will be approximately 3.6x, below its 10-year average.

📉 KMI trades at approximately 20.1x forward earnings, reflecting market adjustments since Cramer's comments.

🏦 Orbis Investment Management held nearly 11.8 million shares, making it the top hedge fund holder in Q2.

Bullish Signals
  • Jim Cramer explicitly stated he is a buyer of Kinder Morgan stock, describing it as undervalued at 19 times earnings.
  • The company reported record second-quarter net income of $867 million, significantly beating Wall Street estimates.
  • Adjusted EBITDA reached a record $2.2 billion in Q2, representing a strong 12% year-over-year increase.
  • Adjusted earnings per share surged 32% to $0.37 during the second quarter of the reporting period.
  • Kinder Morgan maintains a substantial project backlog of $9.6 billion, with 92% consisting of natural gas projects.
  • Over 60% of the project backlog is associated with power generation and local distribution company demand.
  • Management forecasts that 2026 adjusted EBITDA will exceed its original budget by more than 5%.
  • The company's year-end net debt-to-adjusted EBITDA is expected to be approximately 3.6x, below its 10-year average.
Risk Factors
  • Kinder Morgan operates with significant debt levels, maintaining a debt-to-EBITDA ratio of roughly 3.6x as of June 30.
  • Capital-intensive pipeline and infrastructure projects require continued investment which could affect future returns.
Full Analysis
Jim Cramer recently stated that Kinder Morgan (KMI) stock is undervalued and should not have fallen as far, citing a price-to-earnings multiple of 19x as too cheap. He explicitly identified himself as a buyer despite noting the yield does not meet all investor expectations. This commentary follows the company's reported record second-quarter results which significantly exceeded Wall Street estimates. Kinder Morgan delivered net income of $867 million in the second quarter, up from $715 million the prior year, while adjusted EBITDA reached a record $2.2 billion, representing a 12% year-over-year increase. Adjusted earnings per share surged 32% to $0.37, driven by rising demand for natural gas infrastructure linked to LNG exports, power generation, and industrial activity. The company maintains a substantial project backlog of $9.6 billion at the end of the second quarter, with approximately 92% consisting of natural gas projects and over 60% tied to power generation and local distribution companies. Management forecasts that 2026 adjusted EBITDA will exceed its original budget by more than 5%, while year-end net debt-to-adjusted EBITDA is expected to be approximately 3.6x. Despite the bullish sentiment from Cramer and strong operational performance, KMI trades at approximately 20.1x forward earnings, reflecting changes in share price and estimates since his comments. The company operates with significant debt levels, maintaining a debt-to-EBITDA ratio of roughly 3.6x as of June 30, which is below its 10-year average but requires continued capital investment for infrastructure projects.