Pembina Pipeline Corp T.PPL

BUY RATING

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Analyst Actions: TPH Reiterates Buy Rating on Pembina Pipeline Ahead of Q1 Report 2020-04-17 09:46:54 AM ET (MT Newswires)

09:46 AM EDT, 04/17/2020 (MT Newswires) -- Tudor, Pickering & Holt on Friday reiterated its buy rating on the shares of Pembina Pipeline (PPL.TO), saying it expects the midstream oil and gas company to report first-quarter earnings that exceed street expectations. "We are modelling a Q1 EBITDA beat of C$845M versus the Street at C$817M," the investment bank said in a note. "Pipeline contributions expected to be higher y/y due to the KML acquisition (Cochin & Terminals) and conventional volume growth from Phases IV-VI offset by weaker Alliance earnings. Notably, the crude pricing collapse in early March should not impact Q1 volumes as most producers sell on month-ahead contracts ...  On slowing liquids-rich drilling activity, we expect management commentary to focus on strong contractual underpinning (~60% take-or-pay) and low upstream non-IG counterparty risk (16-20% of total exposure). Weaker Marketing contributions expected y/y due to modest rail blockade impact on sales volumes and decreased frac margins, slightly offset by increased crude marketing opportunities from wider differentials.  Following decisive action taken to defer growth capital projects and halt further dividend growth in 2020, the company is better positioned to weat her weak Q2/Q3 prints being FCF positive starting in 2021 (after dividend) with ample coverage and a declining leverage profile. We expect this quarter's beat to be a reminder of the company's top tier asset profile and contractual underpinning (2/3rd take-or-pay). Maintain Buy." Price: 26.83, Change: -0.20, Percent Change: -0.74