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Bear of the Day: KINETIK Holdings (KNTK)

David Bartosiak
·2-min read

Energy markets have been insane this year. A huge spike in demand as the world crawled out of its COVID-induced lockdown, put tons of pressure on prices. Disruptions stemming from war in Europe did not help things along either. However, recently it seems like prices are coming back down to Earth. The expectations for the future have reeled in as well. This is helping normalize this sector which had been a runaway winner this year.

That’s a word to the wise for what might be on the horizon as the calendar turns over to 2023. The Zacks Rank, a system which sorts out stocks with the strongest earnings trends from those with the weakest, is flashing some warning signs. One stock flashing a warning sign is today’s Bear of the Day.

I’m talking about Zacks Rank #5 (Strong Sell) Kinetik KNTK. Kinetik Holdings Inc. operates as a midstream company in the Texas Delaware Basin. It provides gathering, transportation, compression, processing, and treating services for companies that produce natural gas, natural gas liquids, crude oil, and water. The company is headquartered in Midland, Texas.

The reason for the unfavorable rank is that earnings are moving in the wrong direction. Over the last 30 days, analysts have been cutting their earnings estimate numbers for both the current year and next year. The negative moves have dropped our Zacks Consensus Estimates for the current year from $3.25 to $2.04 while next year’s number is off from $3.09 to $2.61.

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The Oil and Gas – Field Services industry is in the Top 10% of our Zacks Industry Rank. That being said, there are a handful of names in this industry which are in the good graces of our Zacks Rank. Those stocks include Zacks Rank #1 (Strong Buy) stocks Halliburton HAL and NexTier Oilfield Services NEX.

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NexTier Oilfield Solutions Inc. (NEX) : Free Stock Analysis Report

Kinetik Holdings Inc. (KNTK) : Free Stock Analysis Report

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Zacks Investment Research