TD Cowen initiates Buy rating on Pembina Pipeline shares, highlighting strong growth

EditorAhmed Abdulazez Abdulkadir
Published 15-01-2025, 03:24 pm
PBA
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On Wednesday, TD Cowen initiated coverage on Pembina Pipeline Corp (PPL (NYSE:PPL):CN) (NYSE: NYSE:PBA), assigning a Buy rating to the company's stock. The research firm set a price target of Cdn$66.00, indicating a positive outlook for the energy infrastructure company, which currently commands a market capitalization of $21.3 billion and has demonstrated strong revenue growth of 37% over the last twelve months.

The coverage launch by TD Cowen is backed by a strong conviction in the company's valuation and prospects. According to InvestingPro data, the company has maintained dividend payments for 20 consecutive years, currently offering an attractive 5.3% yield. Stifel analysts highlighted Pembina Pipeline as their top selection, with the stock currently trading below its Fair Value. The firm's analysis placed Pembina second overall in a recently released scorecard that evaluated various companies.

Pembina Pipeline's capital structure was praised as the best among its peers. Analysts at TD Cowen emphasized the company's solid track record, competitive asset portfolio, and a robust growth opportunity pipeline as key factors supporting their Buy rating. The company trades at a P/E ratio of 16, which InvestingPro analysis suggests is low relative to its near-term earnings growth potential.

The research firm's positive stance on Pembina Pipeline reflects their confidence in the company's ability to navigate the energy market. The Cdn$66.00 price target suggests that Pembina Pipeline's stock has room to grow, presenting an attractive opportunity for investors.

The initiation of coverage and the setting of a favorable price target for Pembina Pipeline by TD Cowen is expected to draw investor attention to the company's performance and future growth potential.

In other recent news, Pembina Pipeline Corp. has seen significant developments. BMO Capital Markets recently adjusted Pembina's price target to Cdn$59.00, maintaining an Outperform rating on the stock despite a softer-than-expected EBITDA guidance for 2025. The firm also noted Pembina's attractive valuation relative to peers and potential for long-term growth. Pembina's revenue growth of 37.18% over the last twelve months was highlighted, even as five analysts revised their earnings expectations downward.

Pembina projected its adjusted EBITDA for 2025 to range between $4.2 billion and $4.5 billion, reflecting anticipated growth across the Western Canadian Sedimentary Basin, new assets, and the full-year effect of the Alliance and Aux Sable asset consolidation. The company's capital investment program for 2025 is set at $1.1 billion, allocated to ongoing construction of previously sanctioned projects, and development spending on potential future projects.

JPMorgan (NYSE:JPM) adjusted the price target for Pembina Pipeline Corp. from Cdn$62.00 to Cdn$63.00, following the company's third-quarter adjusted EBITDA report. Meanwhile, RBC Capital Markets highlighted PG&E Corp. and Williams Companies (NYSE:WMB), Inc in its top sector picks, both maintaining an "Outperform" rating.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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