UPDATE: Citigroup Resumes Coverage On Kinder Morgan On Fair Valuation

In a report published Tuesday, Citigroup analyst Faisel Khan resumed coverage on

with a Neutral rating, down from Buy, and $45.00 price target, up from $42.00. In the report, Citigroup noted, “We are resuming coverage on KMI with a Neutral rating, previously a Buy. We are increasing our target to $45 per share from $42. Shares appear fairly valued as the midstream space begins to experience the headwind of a weaker commodity price environment. Shareholders have benefitted from a ~17% price appreciation since the announcement of the KMP / EPB / KMR acquisition last August and we believe there is only modest upside from here. Our target price of $45/share is supported by three separate valuation methodologies. We estimate KMI can provide 10% total annual returns to shareholders over the long-run at current levels. A robust project backlog for the natural gas pipelines, annual tariff increases on the product pipelines and opportunities in the terminal segment partially offset by potential delays in oil infrastructure projects support our forecasts.” Kinder Morgan closed on Monday at $41.61.