Kinder Morgan (KMI – Research Report), the Energy sector company, was revisited by a Wall Street analyst today. Analyst Michael Blum from Wells Fargo maintained a Buy rating on the stock and has a $33.00 price target.
Michael Blum has given his Buy rating due to a combination of factors surrounding Kinder Morgan’s potential involvement in a significant infrastructure project in Arizona. The company is poised to lead the development of a major gas pipeline, which aims to meet the increasing demand for natural gas from AI data centers, industrial facilities, and West Coast LNG. This project, known as the Copper State Connector, would involve constructing a 630-mile pipeline capable of transporting 2.1 billion cubic feet of gas per day, connecting the Permian Basin to key Arizona markets.
In addition to the pipeline, Kinder Morgan is also involved in the Arizona Energy Storage project, which includes building salt caverns with a total capacity of 4 billion cubic feet. The estimated cost for these projects is around $3.5 billion, based on industry metrics. Despite potential risks related to permitting in politically sensitive regions like New Mexico and Arizona, the company is expected to manage these challenges through strategies like seeking higher returns or cost-sharing agreements. These strategic initiatives and the potential for high returns underpin Blum’s positive outlook on Kinder Morgan’s stock.