TD Cowen Upgrades Pembina and Gibson to Buy Amid Energy Security Shift
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Source: seekingalpha
- Rating Upgrade: TD Cowen has upgraded Pembina Pipeline (PBA) and Gibson Energy (GBNXF) from Hold to Buy, setting price targets at C$75 and C$32 respectively, reflecting confidence in a new energy security paradigm in the Canadian energy sector that favors growth and an improving regulatory outlook.
- Integrated Value Chain: Analyst Aaron MacNeil noted that both companies benefit from rising throughput across a highly integrated natural gas and natural gas liquids value chain, which includes gas processing, pipelines, fractionation, storage, rail logistics, and downstream market access, capturing value at multiple points as volumes progress through the system, thus supporting ongoing optimization and selective enhancements of existing infrastructure.
- Adjacent Opportunities: The companies are extending their core platform into adjacent opportunities such as LNG export, power generation, and NGL value-added initiatives, leveraging established footprints and customer relationships to drive capital-efficient, fee-based EBITDA growth, supported by core system utilization and disciplined platform extensions.
- Market Outlook: With an improving regulatory outlook for energy infrastructure development, Pembina and Gibson's business models are becoming increasingly attractive, likely drawing more investor attention and further enhancing their competitiveness and profitability in the market.
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Analyst Views on PBA
Wall Street analysts forecast PBA stock price to fall
9 Analyst Rating
7 Buy
1 Hold
1 Sell
Moderate Buy
Current: 48.280
Low
35.99
Averages
42.31
High
47.51
Current: 48.280
Low
35.99
Averages
42.31
High
47.51
About PBA
Pembina Pipeline Corporation is an energy transportation and midstream service provider. The Company owns a network of strategically located assets, including hydrocarbon liquids and natural gas pipelines, gas gathering and processing facilities, oil and natural gas liquids infrastructure and logistics services, and an export terminals business. It operates through three divisions: Pipelines Division, Facilities Division and Marketing & New Ventures Division. The Pipelines Division provides customers with pipeline transportation, terminalling, and storage in key market hubs in Canada and the United States for crude oil, condensate, natural gas liquids and natural gas. The Facilities Division includes infrastructure that provides Pembina's customers with natural gas, condensate and NGL services. The Marketing & New Ventures Division undertakes value-added commodity marketing activities, including buying and selling products, commodity arbitrage, and optimizing storage opportunities.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Pembina Advances Heartland Extraction Plant Project
- Project Sanctioning: Pembina has sanctioned the Heartland Extraction Plant (HEP) project with an estimated cost of approximately $570 million, expected to be operational by late 2029, marking a significant step in capital-efficient monetization of its liquid extraction rights and future growth potential.
- Ethane Supply Agreement Update: Pembina and Dow have amended their ethane supply agreement, with the new long-term commitment allowing Pembina to supply 35,000 barrels per day of ethane starting with Dow's Path2Zero project in 2029, representing a 15% increase from the original agreement, thereby strengthening their partnership.
- Capacity Enhancement: The HEP project will have a capacity of 750 million cubic feet per day and will supply Dow with 22,500 barrels per day of ethane, enhancing Pembina's footprint in the Alberta Industrial Heartland while laying the groundwork for future capital-efficient opportunities.
- Financial Outlook: The expected EBITDA build multiple for the HEP project ranges from 5-7 times, combining fixed-fee revenue and frac spread exposure, supporting Pembina's target of 5-7% fee-based adjusted EBITDA per share growth by 2030, indicating a robust financial outlook.
See More
TD Cowen Upgrades Pembina and Gibson to Buy Amid Energy Security Shift
- Rating Upgrade: TD Cowen has upgraded Pembina Pipeline (PBA) and Gibson Energy (GBNXF) from Hold to Buy, setting price targets at C$75 and C$32 respectively, reflecting confidence in a new energy security paradigm in the Canadian energy sector that favors growth and an improving regulatory outlook.
- Integrated Value Chain: Analyst Aaron MacNeil noted that both companies benefit from rising throughput across a highly integrated natural gas and natural gas liquids value chain, which includes gas processing, pipelines, fractionation, storage, rail logistics, and downstream market access, capturing value at multiple points as volumes progress through the system, thus supporting ongoing optimization and selective enhancements of existing infrastructure.
- Adjacent Opportunities: The companies are extending their core platform into adjacent opportunities such as LNG export, power generation, and NGL value-added initiatives, leveraging established footprints and customer relationships to drive capital-efficient, fee-based EBITDA growth, supported by core system utilization and disciplined platform extensions.
- Market Outlook: With an improving regulatory outlook for energy infrastructure development, Pembina and Gibson's business models are becoming increasingly attractive, likely drawing more investor attention and further enhancing their competitiveness and profitability in the market.
See More
Pembina Pipeline Advances C$570M Heartland Project Amid Oil Price Decline
- Project Advancement: Pembina Pipeline has announced the advancement of its C$570 million Heartland extraction plant project, which includes a new 750 million cubic feet per day straddle plant to utilize its extraction rights on the Yellowhead pipeline, despite a 1.5% decline in stock due to falling crude oil prices.
- Growth Target: The company stated that sanctioning the Heartland project is a crucial step towards achieving its 5%-7% fee-based adjusted EBITDA per share growth target by 2030, indicating a strategic focus on capital efficiency.
- Long-Term Agreement: Pembina has signed a new long-term agreement with Dow Inc. to supply ethane starting in late 2029, with a projected increase to 22,500 barrels per day by the end of 2030, which is an increase from the original agreement of 50,000 barrels per day.
- Supply Capacity Enhancement: Including the Heartland agreement and the amended supply agreement, Pembina expects to supply Dow with 57,500 barrels per day of ethane, further strengthening its competitive position and supply capabilities in the market.
See More
Pembina Pipeline Shares Rise Despite Downgrade
- Strong Performance: Pembina Pipeline (PBA) rose 0.7% in Monday's trading despite Citi downgrading its rating from Buy to Neutral with a C$70 price target, as the company achieved a 5%-7% CAGR in fee-based growth through 2030, exceeding the previous 4%-6% forecast.
- Optimistic Growth Outlook: Analyst Spiro Dounis noted that following the Greenlight power project announcement, Pembina boasts one of the largest growth backlogs relative to its size, underpinning its long-term fee-based EBITDA growth guidance, with most projects expected to be sanctioned by the end of 2026.
- Risk Mitigation: Dounis anticipates that Pembina will sanction approximately 75% of its C$10B backlog by the end of 2026, which further de-risks the growth outlook, indicating that the company has overcome several challenges over the past year.
- Stable Market Positioning: Despite a nearly 30% year-to-date gain and trading at over 12x estimated 2027 EBITDA, Dounis believes the current stock price is justified due to the company's low-risk model and high visibility to growth, though he sees limited upside from current levels.
See More
Pembina Pipeline Corporation Renews Share Buyback Program
- Share Buyback Program Renewal: Pembina Pipeline Corporation has received approval from the Toronto Stock Exchange to renew its normal course issuer bid, allowing for the repurchase of up to 5% of its outstanding common shares, which is expected to enhance shareholder value.
- Repurchase Quantity and Timeline: As of May 5, 2026, Pembina has 581,435,185 common shares issued, permitting the repurchase of 29,071,759 shares, with the buyback program commencing on May 19, 2026, and expiring on May 18, 2027.
- Market Response and Financial Flexibility: The company believes that the current market price does not adequately reflect the intrinsic value of its shares, and repurchasing common shares may represent an effective use of financial resources, potentially boosting investor confidence and improving stock performance.
- Repurchase Execution Strategy: Pembina will utilize an automatic purchase plan to buy shares in the market during self-imposed blackout periods, with daily repurchases limited to 25% of the six-month average trading volume to ensure compliance and optimize cash utilization.
See More
Pembina Pipeline Corporation Annual Meeting Voting Results
- Shareholder Voting Participation: At the annual meeting held on May 8, 2026, a total of 350,946,183 common shares were voted, representing 60.37% of the company's issued shares, indicating strong shareholder engagement and interest in corporate governance.
- Director Election Results: All 10 nominated directors received over 95% support, with J. Scott Burrows achieving a 99.79% approval rate, reflecting shareholder confidence in the current management team and facilitating stable implementation of future strategic initiatives.
- Auditor Appointment: KPMG LLP was appointed as the company's auditors with approximately 91.16% of votes in favor, ensuring financial transparency and compliance, which enhances investor confidence in the company's operations.
- Executive Compensation Approval: The company's executive compensation approach received approximately 96.56% approval, indicating shareholder endorsement of the compensation policy, which aids in attracting and retaining key talent to drive long-term growth.
See More
Pembina Advances Heartland Extraction Plant Project
- Project Sanctioning: Pembina has sanctioned the Heartland Extraction Plant (HEP) project with an estimated cost of approximately $570 million, expected to be operational by late 2029, marking a significant step in capital-efficient monetization of its liquid extraction rights and future growth potential.
- Ethane Supply Agreement Update: Pembina and Dow have amended their ethane supply agreement, with the new long-term commitment allowing Pembina to supply 35,000 barrels per day of ethane starting with Dow's Path2Zero project in 2029, representing a 15% increase from the original agreement, thereby strengthening their partnership.
- Capacity Enhancement: The HEP project will have a capacity of 750 million cubic feet per day and will supply Dow with 22,500 barrels per day of ethane, enhancing Pembina's footprint in the Alberta Industrial Heartland while laying the groundwork for future capital-efficient opportunities.
- Financial Outlook: The expected EBITDA build multiple for the HEP project ranges from 5-7 times, combining fixed-fee revenue and frac spread exposure, supporting Pembina's target of 5-7% fee-based adjusted EBITDA per share growth by 2030, indicating a robust financial outlook.
See More
TD Cowen Upgrades Pembina and Gibson to Buy Amid Energy Security Shift
- Rating Upgrade: TD Cowen has upgraded Pembina Pipeline (PBA) and Gibson Energy (GBNXF) from Hold to Buy, setting price targets at C$75 and C$32 respectively, reflecting confidence in a new energy security paradigm in the Canadian energy sector that favors growth and an improving regulatory outlook.
- Integrated Value Chain: Analyst Aaron MacNeil noted that both companies benefit from rising throughput across a highly integrated natural gas and natural gas liquids value chain, which includes gas processing, pipelines, fractionation, storage, rail logistics, and downstream market access, capturing value at multiple points as volumes progress through the system, thus supporting ongoing optimization and selective enhancements of existing infrastructure.
- Adjacent Opportunities: The companies are extending their core platform into adjacent opportunities such as LNG export, power generation, and NGL value-added initiatives, leveraging established footprints and customer relationships to drive capital-efficient, fee-based EBITDA growth, supported by core system utilization and disciplined platform extensions.
- Market Outlook: With an improving regulatory outlook for energy infrastructure development, Pembina and Gibson's business models are becoming increasingly attractive, likely drawing more investor attention and further enhancing their competitiveness and profitability in the market.
See More
Pembina Pipeline Advances C$570M Heartland Project Amid Oil Price Decline
- Project Advancement: Pembina Pipeline has announced the advancement of its C$570 million Heartland extraction plant project, which includes a new 750 million cubic feet per day straddle plant to utilize its extraction rights on the Yellowhead pipeline, despite a 1.5% decline in stock due to falling crude oil prices.
- Growth Target: The company stated that sanctioning the Heartland project is a crucial step towards achieving its 5%-7% fee-based adjusted EBITDA per share growth target by 2030, indicating a strategic focus on capital efficiency.
- Long-Term Agreement: Pembina has signed a new long-term agreement with Dow Inc. to supply ethane starting in late 2029, with a projected increase to 22,500 barrels per day by the end of 2030, which is an increase from the original agreement of 50,000 barrels per day.
- Supply Capacity Enhancement: Including the Heartland agreement and the amended supply agreement, Pembina expects to supply Dow with 57,500 barrels per day of ethane, further strengthening its competitive position and supply capabilities in the market.
See More
Pembina Pipeline Shares Rise Despite Downgrade
- Strong Performance: Pembina Pipeline (PBA) rose 0.7% in Monday's trading despite Citi downgrading its rating from Buy to Neutral with a C$70 price target, as the company achieved a 5%-7% CAGR in fee-based growth through 2030, exceeding the previous 4%-6% forecast.
- Optimistic Growth Outlook: Analyst Spiro Dounis noted that following the Greenlight power project announcement, Pembina boasts one of the largest growth backlogs relative to its size, underpinning its long-term fee-based EBITDA growth guidance, with most projects expected to be sanctioned by the end of 2026.
- Risk Mitigation: Dounis anticipates that Pembina will sanction approximately 75% of its C$10B backlog by the end of 2026, which further de-risks the growth outlook, indicating that the company has overcome several challenges over the past year.
- Stable Market Positioning: Despite a nearly 30% year-to-date gain and trading at over 12x estimated 2027 EBITDA, Dounis believes the current stock price is justified due to the company's low-risk model and high visibility to growth, though he sees limited upside from current levels.
See More
Pembina Pipeline Corporation Renews Share Buyback Program
- Share Buyback Program Renewal: Pembina Pipeline Corporation has received approval from the Toronto Stock Exchange to renew its normal course issuer bid, allowing for the repurchase of up to 5% of its outstanding common shares, which is expected to enhance shareholder value.
- Repurchase Quantity and Timeline: As of May 5, 2026, Pembina has 581,435,185 common shares issued, permitting the repurchase of 29,071,759 shares, with the buyback program commencing on May 19, 2026, and expiring on May 18, 2027.
- Market Response and Financial Flexibility: The company believes that the current market price does not adequately reflect the intrinsic value of its shares, and repurchasing common shares may represent an effective use of financial resources, potentially boosting investor confidence and improving stock performance.
- Repurchase Execution Strategy: Pembina will utilize an automatic purchase plan to buy shares in the market during self-imposed blackout periods, with daily repurchases limited to 25% of the six-month average trading volume to ensure compliance and optimize cash utilization.
See More
Pembina Pipeline Corporation Annual Meeting Voting Results
- Shareholder Voting Participation: At the annual meeting held on May 8, 2026, a total of 350,946,183 common shares were voted, representing 60.37% of the company's issued shares, indicating strong shareholder engagement and interest in corporate governance.
- Director Election Results: All 10 nominated directors received over 95% support, with J. Scott Burrows achieving a 99.79% approval rate, reflecting shareholder confidence in the current management team and facilitating stable implementation of future strategic initiatives.
- Auditor Appointment: KPMG LLP was appointed as the company's auditors with approximately 91.16% of votes in favor, ensuring financial transparency and compliance, which enhances investor confidence in the company's operations.
- Executive Compensation Approval: The company's executive compensation approach received approximately 96.56% approval, indicating shareholder endorsement of the compensation policy, which aids in attracting and retaining key talent to drive long-term growth.
See More
