Kinetik Holdings Inc. (NYSE: KNTK) experienced a significant decline in its stock price on October 8, 2023, dropping to a new 52-week low following a downgrade from analysts at Scotiabank. The investment bank reduced its price target on Kinetik shares from $51.00 to $45.00, while maintaining a “sector outperform” rating. On that day, Kinetik’s stock traded as low as $33.81 before closing at $34.15, with a trading volume of 141,699 shares. This decline marks a notable dip from its previous close of $33.86.
Analysts’ sentiments have shifted regarding Kinetik’s stock in recent weeks. On the same day as Scotiabank’s downgrade, Barclays also issued a revised price objective, lowering it from $43.00 to $40.00 and assigning an “equal weight” rating. Meanwhile, Wolfe Research reaffirmed its “outperform” rating with a price target of $42.00 in a report released on November 7, 2023. Goldman Sachs set a price objective of $46.00 for Kinetik shares on October 14, 2023. Weiss Ratings provided a “hold (c)” rating that same week, while Mizuho established a target price of $48.00 on October 29, 2023.
The overall consensus among analysts presents a mixed outlook for Kinetik, with seven analysts recommending a “Buy” rating and five issuing a “Hold.” According to data from MarketBeat, Kinetik currently holds a consensus rating of “Moderate Buy” with an average price target of $50.30.
Institutional Investor Activity
Recent trading trends indicate that institutional investors are actively adjusting their stakes in Kinetik. Man Group plc increased its holdings by 37.0% during the third quarter, acquiring an additional 26,826 shares and bringing its total to 99,275 shares valued at approximately $4.24 million. Similarly, Squarepoint Ops LLC raised its stake by 6.5%, now owning 238,483 shares worth $10.19 million.
Wellington Management Group LLP made a substantial move by boosting its investment by 73.3%, now holding 644,273 shares valued at around $27.54 million. Comerica Bank showed a remarkable increase of 901.6%, acquiring an additional 12,126 shares for a total of 13,471, worth approximately $576,000. Cadence Bank also increased its position by 3.0% during the same period.
Currently, institutional investors hold 21.11% of Kinetik’s stock, reflecting a cautious but engaged market response.
Recent Financial Performance
Kinetik’s recent earnings report, published on November 5, 2023, revealed a challenging quarter. The company reported earnings of $0.03 per share, significantly below the consensus estimate of $0.23, falling short by $0.20. The report indicated a negative return on equity of 5.74% and a net margin of 6.70%.
The company generated revenue of $463.97 million, which also missed analyst expectations of $604.57 million. In comparison to the same quarter in the previous year, Kinetik’s revenue rose by 17.1%, although this year-over-year growth did not translate into anticipated earnings.
Kinetik Holdings Inc. operates primarily in the Texas Delaware Basin, providing essential midstream services such as gathering, transportation, compression, processing, and treating for natural gas, crude oil, and water. Headquartered in Midland, Texas, Kinetik continues to navigate a fluctuating market landscape while managing investor expectations and operational challenges.
As analysts and investors monitor Kinetik’s performance closely, the forthcoming months will be critical in determining the company’s trajectory and stock performance.
