Gibson Energy Maintained at Hold by TPH 09:50 AM EDT, 11/02/2021 (MT Newswires) -- Tudor, Pickering and Holt on Tuesday reiterated its hold rating on the shares of Gibson Energy (GEI.TO) with a C$23.00 target price after the oil infrastructure and processing company reported third-quarter results that met expectations.
"Neutral. Gibson printed in-line Q3 Adj. EBITDA of C$111mm matching TPH and ~1% ahead of the Street with partial contribution from the first phase of the Diluent Recovery Unit (DRU) and Marketing performance within the guided C$15-20mm range for the quarter," analyst Matt Taylor said in a note. "The DRU was placed into service on-schedule and within budget despite a recent regulatory filing showing modifications are required.
The company does not expect an EBITDA impact (take-or-pay contract) or increased capex (lump-sum contract) as a result, though a facility shut-down is required to implement the modifications. The company's previously disclosed GHG plans were reiterated following the release in mid-October announcing receipt of a 'AAA' rating by MSCI and target of achieving net-zero Scope 1 & 2 emissions by 2050.
The challenging market outlook remains unchanged - crude oil pricing backwardation, a tight WCS-WTI differential, and muted production growth - supporting our view new growth project announcements will be pushed into 2022.
Leverage and dividend payout remain well within targeted ranges providing financial flexibility to self-fund the capital program."