Wa-HA! Back in Positive Territory; Now Looking for a Volume Inflection

Research evidence excerpt

Wa-HA! Back in Positive Territory; Now Looking for a Volume Inflection

uentially, earnings will almost

certainly be up sequentially due to a full quarter of commodity uplift as well as better marketing

gains from more discounted Waha. Even if we assume KNTK will do $250mn in 2Q (vs. $251mn

in 1Q), and KNTK achieves the low-end of its 3Q and 4Q guidance of $260-$270mn, KNTK's FY26

EBITDA will come in at $1,021mn. So, we expect KNTK to guide to at least $1,020 at the low-end.

Longer-term story continues to look better in higher crude backdrop. We expect volumes thru

the end of the year to improve sequentially, but we continue to monitor the global macro situation

and look for any updates / commentary from KNTK as well as producers this quarter. We expected

muted commentary, similar to last quarter, as the macro and crude backdrop remains very volatile

and producers are likely waiting for more sustainably higher prices before embarking on any

meaningful production increase.

Slightly raise estimates on higher marketing; maintain Hold. We slightly raise 2Q and FY estimates Julien Dumoulin-Smith * | Equity Analyst

from $252mn to $253mn and from $1,037mn to $1,043mn for FY26, above consensus of $1,027mn +1 (281) 774-2066 | jds@jefferies.com

and the midpt of guidance of $1,000mn. We see upside to the current guide and volumes should Paul Zimbardo * | Equity Analyst

start to re-accelerate into the back half with Waha positive. That said, KNTK now trades at ~9x on +1 (212) 778-8497 | pzimbardo@jefferies.com

FY28, roughly in line with peers, and we see limited NT upside with consensus already towards the Lloyd Byrne * | Equity Analyst

high-end of guidance and above guidance on 2Q. Need to have confidence in longer term growth story +1 (212) 323-7528 | lloyd.byrne@jefferies.com