Gibson Energy Inc T.GEI

HOLD RATING MAINTAINED

[Ariahp]

Gibson Energy Hold Rating Reiterated by TPH Ahead of Third-Quarter Results

 

07 Oct 202111:19 ET

 

11:19 AM EDT, 10/07/2021 (MT Newswires) -- Tudor, Pickering and Holt on Thursday reiterated its hold rating on the shares of Gibson Energy (GEI.TO) with a C$23.00 target price ahead of third-quarter results from the oil infrastructure and pipeline company.

"We are modelling a modest Q3 EBITDA miss of C$112mm (-3% vs Street) driven by weaker Marketing contributions in the C$15-20mm range (vs run-rate of C$20-30mm), offset by contributions from new tankage placed into service during Q4'20," analyst Matt Taylor said in a note. "We expect commentary on run-rate Infrastructure contributions to be consistent after factoring in the impact of the rail loading contract payout that occurred in Q2. New growth remains the key to this story with the persistent pipeline constraint narrative leading to significant crude discounts being solved with in-service of Line 3 and upcoming completion of Trans Mountain (TMX). Investors will be looking for commentary on expectations of additional tankage and new Diluent Recovery Unit capacity, both of which are unlikely given production growth remains muted and TMX in-service will likely be delayed into 2023. On capital allocation, we suspect share repurchases are off the table with Marketing trending at or below the bottom end of the annual run-rate level with the previously disclosed 2021 capex guidance of up to C$200mm expected to be fully deployed. Overall, we expect a neutral stock reaction from a modestly weaker print with no real surprises. Maintain Hold."