RBC Comments RBC Capital Markets Says Pembina 'Uniquely Positioned' For Upside
10:19 AM EDT, 08/08/2022 (MT Newswires) -- RBC Capital Markets said over the weekend Pembina Pipeline Corp. (PPL.TO) is uniquely positioned to offer investors upside to growing WCSB gas and NGL volumes through its unutilized capacity and potential for growth projects, high commodity prices and wide commodity spreads.
RBC also flagged Pembina's attractive capital allocation strategy, which features true free cash flow generation that provides the company the ability to repurchase shares and reduce leverage.
Pembina upgraded its 2022 adjusted EBITDA guidance of $3.575 billion to $3.675 billion from the previous range of $3.45 billion to $3.6 billion.
This reflects stronger results from the marketing segment, higher contributions from the Alliance and Cochin pipelines as well as certain gas services assets, and the anticipated closing of the joint venture with KKR later this month.
RBC noted that strong commodity prices are helping Pembina generate additional cash flow that will likely be used to reduce leverage, at least in the near term until it becomes clearer what growth projects could materialize.
RBC gave Pembina an outperform rating with a $58.00 price target.