Jefferies announced a downgrade of Kinetik Holdings Inc (NYSE:KNTK) from Buy to Hold on Friday and assigned a $43.00 price target to the midstream energy company. The research note points to a lofty price-to-earnings ratio of 97.62 for the stock, which the firm views as evidence that shares may already reflect expected upside.
The downgrade follows a 21% appreciation in Kinetik’s share price since December 19, a pace that the firm highlights as materially stronger than peer gains of roughly 11% over the same span. That relative outperformance is one reason Jefferies deems the shares "less compelling" at present.
Market data referenced in the research shows a 13.23% year-to-date return for the stock, while technical signals indicate the shares may be in overbought territory. Jefferies expects a subdued fourth-quarter 2025 update from the company and sees few near-term catalysts that would materially change the firm’s view.
Operational challenges are central to the firm’s cautious stance. Jefferies highlights the likelihood of continued curtailments, delayed activity and weak Waha pricing - headwinds it expects to persist at least through the first half of 2026. Reflecting those dynamics, the firm models Kinetik’s 2026 adjusted EBITDA about 4% below consensus estimates.
Despite the more conservative EBITDA outlook, Kinetik’s enterprise value to EBITDA multiple remains elevated at 17.51, a premium that Jefferies notes is at odds with the company’s anticipated operational softness. The firm also flagged the prospect of an insider-sale overhang in the $40 to $45 per share range as another factor weighing on the stock’s near-term appeal.
Counterbalancing some of these concerns is Kinetik’s dividend yield, which stands at an attractive 8.1% and may provide a degree of support for the share price. In addition, the company’s Fair Value assessment is reported to sit close to the current market level, indicating that the stock may not be significantly mispriced in either direction.
Analyst actions and consensus movements
The Jefferies downgrade arrives amid a cluster of analyst updates ahead of Kinetik’s upcoming earnings reports. Wolfe Research downgraded the company from Outperform to Peerperform, citing commodity price concerns and messaging, and materially reduced its 2026 EBITDA estimate to $960 million.
Goldman Sachs revised its price target to $42 while retaining a Buy rating, noting expected slight downward pressure on fourth-quarter 2025 EBITDA tied to Waha price and volume effects. Raymond James moved in the opposite direction, upgrading Kinetik from Market Perform to Outperform and assigning a $46 price target on a more favorable 2026-27 outlook and an asserted attractive risk-reward profile.
RBC Capital trimmed its price target to $46 from $52 but kept an Outperform rating following results for the third quarter of 2025 that fell short of expectations. Separately, Jefferies had earlier initiated coverage with a Buy rating and a $41 price target, pointing to growth prospects thought to be underappreciated after a difficult fiscal 2025 forecast.
Outlook
Jefferies’ revised stance emphasizes valuation and the persistence of industry-specific headwinds as determinants of limited upside from current levels. While Kinetik’s dividend yield and a Fair Value near the market price provide some defensive attributes, the combination of rich multiples, potential insider-selling, and expected operational softness form the basis for the firm’s Hold recommendation.