SOBO Should I Buy
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South Bow Corp (SOBO) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the stock has some positive indicators, such as bullish moving averages and improving net income and EPS, the lack of significant growth potential, declining revenue, and no strong trading signals suggest a cautious approach. Holding the stock or waiting for better entry points is recommended.
The technical indicators show a bullish trend with MACD above 0 and positively contracting, and moving averages (SMA_5 > SMA_20 > SMA_200) confirming upward momentum. However, RSI is in the neutral zone at 79.726, and the stock is near resistance levels (R2: 30.059).
Analysts note strong power demand and LNG export tailwinds, indicating long-term opportunities.
Revenue dropped by -13.62% YoY, and gross margin declined by -14.13% YoY. Analysts highlight risks such as single-asset EBITDA concentration, operational execution, and elevated leverage. No recent news or significant trading trends from hedge funds or insiders.
In Q3 2025, revenue decreased to $461M (-13.62% YoY), while net income increased to $93M (+54.72% YoY). EPS rose to $0.45 (+55.17% YoY), but gross margin dropped to 32.32% (-14.13% YoY).
Analysts have mixed ratings. Scotiabank raised the price target to $30, citing long-term opportunities. UBS and Barclays initiated coverage with Neutral and Equal Weight ratings, respectively, highlighting attractive dividends but limited growth potential and risks. RBC and BMO raised price targets to C$41 and C$40, respectively, with Market Perform and Outperform ratings.
