Kinetik Holdings Inc

KNTK: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$46.00	Kljw	Dxxwghw

Kinetik: Increasing Our Fair Value Estimate Off 2023 Results and Outlook

Stephen Ellis ,

Mar 22, 2024

After updating our model to reflect the 2023 results and refreshing commodity prices, we are increasing our Kinetik fair value estimate to $39 from $36. Our no-moat rating is unchanged. The fair value estimate increase is due to improving margins on delivered products in the midstream business and stronger-than-expected utilization. We see the cash being generated by the significant investments made over the last few years flowing into the business in 2024, driving down debt/EBITDA to 2.6 times in 2025 from 5.4 times in 2023. The EBITDA/interest expense is also improving to 6.3 times from 3.2 times over the same timeframe.

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