Wolfe Research moved to downgrade Kinetik Holdings Inc. (NYSE: KNTK) from Outperform to Peerperform on Tuesday, pointing to concerns about commodity prices and the company's recent external messaging. The analyst note comes as the stock has slid roughly 30.5% over the past year, even as Kinetik continues to offer an 8.14% dividend yield that remains among the highest in its sector.
In its updated work, Wolfe Research materially lowered its projections ahead of Kinetik's fourth-quarter earnings. The firm now models 2026 EBITDA at $960 million, a figure it says is about 10% below the broader sell-side consensus and beneath what Wolfe characterizes as buy-side expectations of approximately $1 billion. That downward revision forms the basis for the downgrade and for Wolfe's caution on near-term performance.
Wolfe further signaled skepticism about investor hopes for a quick rebound. While noting there is significant short interest and that some investors are positioned to buy into an eventual recovery, the firm warned that the 2026 outlook may disappoint and trigger a reset in forward expectations and valuation assumptions.
Even under a scenario in which gas constraints ease and EBITDA rebounds sharply in 2027, Wolfe projects Kinetik would trade at a slight premium to OGE Energy Partners - OKE - and only about a half-turn discount to Targa Resources - TRGP - on 2027-28 EV/EBITDA metrics. Wolfe emphasized that those relative valuations would persist despite what it views as Kinetik's weaker balance sheet and higher execution risk compared with peer companies.
Market participants have not been unanimous in their views, and several brokerages have issued fresh ratings and targets for Kinetik in recent days:
- Goldman Sachs adjusted a price target to $42.00 while maintaining a Buy rating and forecasting fourth-quarter 2025 EBITDA of $238 million, described as slightly below prior estimates. Separately in the coverage landscape, Goldman also revised a price target to $40.00 from $46.00, citing commodity margin headwinds and delays in the Kings Landing project as contributors to recent underperformance.
- Raymond James upgraded Kinetik from Market Perform to Outperform and set a price target of $46.00, pointing to an improved outlook for 2026-27.
- Jefferies initiated coverage with a Buy rating and a $41.00 price target, noting growth prospects despite a difficult fiscal 2025 forecast.
- RBC Capital reduced its price target from $52.00 to $46.00 but kept an Outperform rating after Kinetik's third-quarter results missed expectations.
The range of analyst actions highlights divergent views about Kinetik's near-term pressures and its longer-term recovery potential. Some firms are trimming targets and flagging project delays and commodity-margin pressures, while others are taking a more constructive stance on 2026 and beyond.
For investors and market observers, the key issues outlined in recent coverage are clear: the company faces commodity-price volatility, project timing risks, and elevated execution demands, all while trading with a high dividend yield that reflects yield-seeking interest in the sector. Wolfe Research's downgrade centers on the firm belief that 2026 results will fall short of current expectations and that such an outcome would require a re-pricing of the stock relative to peers.
Given the mix of outlooks from major brokerages, the market response will likely hinge on actual fourth-quarter results, management commentary on projects and volumes, and how commodity margins evolve heading into 2026 and 2027.