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Kinder Morgan Q1 Earnings Beat Estimates, Lifts 2026 Outlook, RBC Says

-- Kinder Morgan's (KMI) Q1 earnings exceeded expectations, supported by stronger volumes, winter weather tailwinds and firmer commodity prices, RBC Capital Markets strategists said in a note on Friday.

RBC analysts said it now expects 2026 adjusted EBITDA to come in at least 3% above its prior budget, reflecting stronger operating conditions across its network.

However, despite the upbeat results, Kinder Morgan shares edged lower following the release, which analysts attributed to limited backlog growth, uncertainty surrounding its Western Gateway project and investor positioning ahead of other earnings in the sector.

The broader midstream space has continued to outperform this year. The Alerian MLP Index rose 1.6% in the week ended April 23, outpacing the S&P 500, which gained 1%. Year-to-date, the midstream benchmark is up 14.5%, compared with a 3.8% rise in the S&P 500.

RBC said that strength in the sector has been supported by steady cash flows and growing demand for natural gas infrastructure, even as commodity prices remain volatile.

Front-month West Texas Intermediate crude rose about 2% on the week to about $97 per barrel, while Henry Hub natural gas prices slipped about 2% to $2.59 per million British thermal units.

Cheniere Energy (LNG), in contrast, declined 2.1%, in what RBC analysts said could reflect positioning ahead of earnings and a rotation into other midstream names.

Master limited partnerships modestly outperformed C-corporations during the week, with MLPs up 1.2% versus a 1% gain for corporates.

Going forward, investors are focused on upcoming earnings from Enterprise Products Partners (EPD) and Oneok (OKE), both scheduled to report on April 28.

Market participants will be watching for commentary on the impact of higher commodity prices, producer activity, project ramp-ups, export demand and capital allocation plans, as well as the effects of winter weather and evolving price spreads across key basins.

RBC analysts flagged potential read-throughs for other operators, including Williams Companies (WMB), Energy Transfer (ET), Targa Resources (TRGP) and Sunoco (SUN), citing expected tailwinds from seasonal demand, marketing optimization and commodity price volatility.

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