TD Waterhouse Upgrade TodayPembina Pipeline Corp.
(PPL-T, PBA-N) C$46.97 | US$37.60
Decreasing Our Risk Rating
Event
We are reducing our risk rating on Pembina Pipeline Corp. (PPL) to LOW from Medium.
Impact: SLIGHTLY POSITIVE
We are reducing our risk rating on Pembina Pipeline Corp. (PPL) due to our view that industry tailwinds, PPL's growing scale of operations, improved cost of capital, as well as access to capital and other factors have reduced the risk of owning the stock. We also believe the more constructive outlook should support sustained higher valuations than we had previously been using in our target valuation. As such, we have increased our target valuation to be more reflective of recent trading valuations, and this results in our target price increasing by two dollars to $50.00.
TD Investment Conclusion
We believe PPL's Newco JV enhances the company's ability to benefit from industry tailwinds, including capturing growing volumes in WCSB, as well as likely providing opportunities to invest in value-chain extension and expansions into new markets. PPL's proposed market access and carbon-storage initiatives demonstrate to us the company's ability to pivot towards a lower-carbon-energy future.