Kinder Morgan, Inc. (KMI) DCF Valuation
TGM's two-stage DCF values Kinder Morgan, Inc. (KMI) between $8.73 and $27.78 depending on assumptions, with a base case of $15.18. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth (floored at 2%)), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$32.25 is justified only if free cash flow grows about +12.8% a year (fading to 2.5% long-run) at a 7.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 8.5% | $8.73 |
| Base case | 2.0%/yr | 7.5% | $15.18 |
| Optimistic | 5.0%/yr | 6.5% | $27.78 |
| Analyst DCF (FMP) | independent reference — different model | $51.67 | |
Current Price
$32.25
Market-Implied Growth
+12.8%/yr
vs -0.5% 5Y actual
Model Scenario Range
$8.73 – $27.78
model output — not a price target
KMI DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for KMI (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $3.3B · 2.22B shares · net debt $32.1B
Estimated Fair Value
$14.64
-54.6% vs $32.25
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 2.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $32.25; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $24.61 | $28.58 | $33.87 | $41.28 | $52.39 |
| 6.5% | $16.75 | $19.02 | $21.86 | $25.50 | $30.36 |
| 7.5% | $11.52 | $12.94 | $14.64 | $16.73 | $19.34 |
| 8.5% | $7.78 | $8.73 | $9.83 | $11.14 | $12.71 |
| 9.5% | $4.98 | $5.64 | $6.40 | $7.27 | $8.29 |
About Kinder Morgan, Inc.
Kinder Morgan, Inc. operates as a leading energy infrastructure company across North America. Its extensive operations are categorized into four primary business segments: Natural Gas Pipelines, Products Pipelines, Terminals, and CO2. The Natural Gas Pipelines segment manages a vast network of interstate and intrastate natural gas pipelines, along with underground storage systems. This includes natural gas gathering systems, processing and treatment facilities, natural gas liquids fractionation plants, transportation systems, and infrastructure for liquefied natural gas liquefaction and storage. Within its Products Pipelines segment, the company owns and operates pipelines designed for refined petroleum products, crude oil, and condensate, supported by associated product terminals and facilities for petroleum pipeline transmix. The Terminals segment involves the ownership and operation of both liquid and bulk terminals that are utilized for storing and handling a wide array of commodities, such as gasoline, diesel fuel, various chemicals, ethanol, metals, and petroleum coke. This division also includes the ownership of tankers. Lastly, the CO2 segment is dedicated to the production, transportation, and marketing of carbon dioxide, primarily for enhanced oil recovery from mature oil fields. This segment also holds interests in or operates oil fields and gasoline processing plants, oversees a crude oil pipeline system located in West Texas, and manages renewable natural gas (RNG) and liquefied natural gas (LNG) facilities. In total, Kinder Morgan owns and operates approximately 83,000 miles of pipelines and 143 terminals. The company, initially named Kinder Morgan Holdco LLC, officially changed its name to Kinder Morgan, Inc. in February 2011. Founded in 1936, its corporate headquarters are situated in Houston, Texas.
- Sector
- Energy
- Industry
- Oil & Gas Midstream
- CEO
- Kimberly Allen Dang