Kinetik Holdings Inc: Thoughts Into 2Q26: Commodity and Optimization Benefits Present Offset to Volume Curtailments

研报英文原文证据摘录

Kinetik Holdings Inc: Thoughts Into 2Q26: Commodity and Optimization Benefits Present Offset to Volume Curtailments

Jeremy Tonet, CFA AC North America Equity Research

(1-212) 622-4915 13 July 2026 J P M O R G A N

jeremy.b.tonet@jpmorgan.com

Investment Thesis, Valuation and Risks

Kinetik Holdings Inc (Overweight; Price Target: $57.00)

Investment Thesis

A full-service Delaware-focused midstreamer with downstream integration, KNTK

possesses palpable Permian producer propulsion. Combining one of the largest Permian

processing positions with prominent Permian takeaway in Permian Highway and the Shin

Oak NGL pipeline creates clear downstream integration advantages that separate KNTK

from SMID-cap peers. This significant pipeline presence also enhances cash flow stability.

While recent execution headwinds have weighed on the stock, we see weakness as

overdone.

Valuation

We establish a Dec 2027 price target of $57/share based on a blended methodology, giving

50% weights to both the DCF-derived value and the EV/EBITDA value. We forecast DCF/

share for 10 years and use a multiple to adjust for the appropriate terminal growth rate and

required rate of return based on leverage/liquidity risk, distribution coverage outlook,

volumetric/recontracting risk, commodity/marketing risk, take-or-pay contract profile, and

other factors. On the DCF, we maintain the discount rate at 10.0% and the terminal yield at

-6.0%. Our 10.00x 2028e EV/EBITDA target multiple reflects strong EBITDA growth,

offset by recent execution issues and commodity price sensitivity. We adjust these

assumptions based on current fundamentals.

Source: J.P. Morgan estimates.

Risks to Rating and Price Target

• A Permian-exclusive, Delaware-centric footprint lends itself to strong economics and