Key Takeaways:
- Backlog Growth: Kinder Morgan’s $10 billion project backlog isn’t shrinking despite billions placed into service, as natural gas demand keeps adding new opportunities.
- Price Projection: Based on current assumptions, KMI stock could reach $37 by December 2028.
- Potential Gains: This target implies a total return of 18% from the current price of $31.
- Annual Return: Investors could see roughly 7% annual growth over the next 2.3 years.
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Kinder Morgan (KMI) delivered a standout Q2 in 2026, with adjusted EBITDA up 12% year-over-year and adjusted EPS climbing 32%.
Every business segment contributed to the growth, and management raised full-year guidance as a result.
Executive Chairman Rich Kinder summed up the story in a few lines: strong results, a growing natural gas market, and enough internal cash flow to fund new projects while still paying the dividend.
- The company now expects full-year adjusted EBITDA at least 5% above budget and adjusted EPS at least 12% above budget.
- Natural gas transport volumes grew 7% year-over-year, while gathering volumes jumped 26%, led by a 54% surge on the Haynesville-focused KinderHawk system.
- Debt-to-EBITDA improved to 3.6x, down from 3.8x at the start of the year, giving the company room to fund more growth without stretching the balance sheet.
Despite the strong quarter, KMI shares still trade at a level that leaves room for upside based on TIKR’s model.
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What the Model Says for Kinder Morgan Stock
Kinder Morgan’s growth story centers on natural gas infrastructure. Rising LNG exports and growing power demand, much of it tied to data centers, are driving demand for the pipelines and processing capacity the company already owns.
Management pointed to Wood Mackenzie data showing U.S. natural gas demand could exceed 160 billion cubic feet per day by 2035, an increase of roughly 46 billion cubic feet per day from 2025 levels.
Three major expansion projects, Mississippi Crossing, South System Expansion 4, and Trident, are all on schedule and on budget, with Trident already 60% complete.
Beyond the current $9.6 billion backlog, management described a “shadow backlog” of over $10 billion in additional opportunities, mostly tied to power generation demand in regions like the Southeast, where one utility alone projected over 75 gigawatts of potential new power demand through the mid-2030s.
The company expects to sanction significant new projects before year-end, and said this opportunity set has kept growing even as projects get added to the official backlog.
Our Valuation Assumptions
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for Kinder Morgan stock:
1. Revenue Growth: 5.3%
This sits below Kinder Morgan’s 2025 growth of 12.2%, which was boosted by strong commodity prices and one-time items like winter storm impacts.
The more modest figure reflects a pipeline business that grows steadily through new projects rather than in sudden bursts, in line with the company’s own conservative guidance approach for the back half of 2026.
2. Operating margins: 28.3%
Kinder Morgan’s 2025 operating margin already sits at 27.9%, and the model assumes a slight improvement.
This lines up with management’s comments about squeezing additional margin out of the Texas intrastate business and continuing capacity sales at attractive rates across the interstate network.
3. Exit P/E Multiple: 19.6x
Kinder Morgan trades at 21.2x forward earnings today.
The model assumes compression to 19.6x, matching the company’s three-year average.
This reflects a pipeline stock that tends to trade in a fairly narrow valuation band, rather than one likely to see dramatic multiple expansion.
Based on these inputs, TIKR’s model projects KMI could reach $37 per share by the end of 2028, an 18% total return, or about 7% annualized.
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What Happens If Things Go Better or Worse?
Kinder Morgan operates in a business tied to long-term contracts and steady infrastructure demand, so the range of outcomes here is narrower than for many growth stocks.
Here’s how KMI stock might perform under different scenarios through December 2030:
- Low Case: If revenue growth slows to 4.2% and net income margins reach 17.8%, investors could still see a 10% total return, or 2.3% annually.
- Mid Case: With 4.6% growth and 18.8% margins, the total return comes to 32.7%, or 6.9% annually.
- High Case: If growth accelerates to 5.1% with margins at 19.5%, returns could hit 54.6% total, or 10.7% annually.
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The range mostly comes down to how much of that $10 billion-plus shadow backlog converts into signed contracts, and how quickly rising power demand from data centers and LNG exports turns into new pipeline projects on the ground.
How Much Upside Does Kinder Morgan Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
