NEW YORK (TheStreet) -- Shares of Kinder Morgan (KMI) - Get Report were up in pre-market trading on Monday after BMO Capital Markets raised its rating on the stock to "outperform" from "market perform."
The firm increased its price target to $26 from $20 on shares of the Houston-based pipeline operator.
The upgrade reflects BMO's belief that Kinder Morgan's $5.4 billion proposed expansion of its Trans Mountain oil pipeline will be approved.
This would allow for "a 2019 dividend rebasing to $1.50 a share with subsequent growth of 10%, coverage of 1.2x,
and leverage metrics comfortably below 5.0x," the firm claimed.
"Kinder Morgan is the optimal core holding for investors with a two-year investment horizon, the time frame over which we think our thesis plays out," BMO stated.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C-.
Kinder Morgan's strengths such as its expanding profit margins over time are countered by weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity.
You can view the full analysis from the report here: KMI
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.