Attractive Utility Assets and RIPET UpsideOUR TAKE: Neutral. A weaker-than-expected Gas Midstream contribution was the main reason the quarter was below our expectations. On the other hand, AltaGas' Utility business performed well, which we view favourably and is a core component of our Sector Outperform thesis. We believe the utility assets are not fairly reflected in the share price. At 12.7x 2021E P/E, we view AltaGas as a way for investors to get exposure to high-growth utility assets at a discounted valuation (the other Canadian utilities are trading in the 18x-19x range). KEY POINTS Reiterated guidance. AltaGas continues to see 2020 EBITDA of $1,275m-$1,325m and our estimate moves down to $1,297m which is just below the midpoint. We expect the Utility business to continue to perform well and grow but we see some headwinds for the Gas segment. Our 2020 EPS estimate increases to $1.27, which is toward the upper end of the 2020 guidance range of $1.20-$1.30. The increase largely relates to the lower Q2 depreciation adjustment that we view as one-time in nature ($0.04/sh). Our longer-term estimates do not materially change and we continue to see AltaGas generating a strong 7% EPS CAGR for 2019A-2022E. Could be upside to our longer-term RIPET estimates. In July, RIPET loaded three ships, with a fourth ship currently at anchorage at Prince Rupert. Management's goal is to load eight ships a quarter though we expect nine in Q3. In 2021, as the company optimizes logistics, we assume ~55 kbpd of export volumes and 60 kbpd in 2022. This is below the facility's potential capacity of 80 kbpd. Getting to this figure could add an incremental ~$50m (4%) to 2022 EBITDA. Also, we assume that margins per barrel step down from $8.15/bbl in 1H/20 to $8.00/bbl in 2H/20 and $7.00/bbl thereafter. Well positioned for US tax reform 2.0. With the US Presidential election less than 100 days away and Biden polling favourably, the implications of a higher tax rate was a focus of the conference call. As we recently highlighted in our note, Canadian Utilities a Winner of a Biden Presidency, we believe tax reform moving rates higher could strengthen AltaGas' balance sheet. We estimate it would be ~1% dilutive to EPS largely due to lower income from its unregulated operations. However if the higher taxes are recovered in utility rates it would add 3% to FFO and improve the balance sheet, which has been a concern for investors. Selling its stake in Mountain Valley Pipeline would also help strengthen AltaGas' balance sheet – we expect this to occur closer to the project's in-service date.