iA Capital ..G&M In his weekly update on TSX-listed energy infrastructure companies, iA Capital Markets analyst Elias Foscolos raised his target prices for a group of stocks in response to recent strong price performance, seeing “the kinetic energy” of higher oil prices leading the sector higher.
“With the recent unrelenting surge in the price of WTI and the continued advance of stock returns, particularly in the pipeline and midstream space, we have elected to superimpose our coverage universe’s share price movements relative to movements in oil prices (WTI),” he said. “Prior to March 2020, our Midstream and Pipelines companies seemed to have a modest correlation to movements in WTI. However, since March 2020, a stronger coupling appears to have occurred as the sub-segment’s selloff happened simultaneously with the COVID-19-induced oil price crash, tightening the correlation between the Pipelines and Midstream stocks’ returns and WTI prices.
“Our take is that the rebound in WTI year-to-date, let’s call it sector momentum, has been a major factor in the sector rebound, as we have not materially changed our 2022 outlook.”
Mr. Foscolos’s changes were:
- AltaGas Ltd. (
, “buy”) to $27 from $26. The average on the Street is $25.70. - Enbridge Inc. (
, “strong buy”) to $56 from $54. Average: $52.77. - Gibson Energy Inc. (
, “hold”) to $26.50 from $25.50. Average: $24.82. - Keyera Corp. (
, “hold”) to $34 from $33. Average: $32.07. - TC Energy Corp. (
, “strong buy”) to $76 from $74. Average: $70.42.