TPH - Pembina Pipeline Maintains Buy Rating - Target $45 1:14 AM EST, 02/25/2022 (MT Newswires) -- Tudor, Pickering and Holt on Friday maintained its buy rating on the shares of Pembina Pipeline (PPL.TO) with a C$45.00 target price after the oil and gas infrastructure and processing company reported better than expected fourth-quarter results.
"Positive. Pembina printed a Q4 Adj. EBITDA beat of C$970MM, well ahead of the Street (+9%) with a narrower variance to TPH (+6%) driven by higher Facilities contributions and outsized Marketing margins (+46% vs TPH)," analyst Matt Taylor noted.
"FY'21 Adj. EBITDA of C$3.43B exceeded the top end of the guidance range of C$3.30-3.40B. The company reiterated FY'22 guidance of C$3.35-3.55B (TPHe C$3.59B) with a continued plan to allocate up to the first C$200MM of excess free cash flow to share repurchases by mid-2022 (C$17MM repurchased in Q4'21).
On new projects, the Hythe Deep cut facility (H1'22) and the LPG terminal expansion (Q1'22) expect to reach FID in the coming months, while the Peace Phase VIII expansion remains deferred (could be H1'22) due to ongoing discussions between the government and First Nations.
We expect modest outperformance today on the back of stronger results and utilization of the buyback program with further equity upside predicated on increasing investor confidence in the 2022 outlook - level of conservatism on Marketing assumptions given Q4 outperformance, and volume expectations versus levels seen when guidance was formulated in Nov'21 will be most topical."