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AltaGas Ltd T.ALA.PR.B


Primary Symbol: T.ALA Alternate Symbol(s):  ATGFF | T.ALA.PR.A | ATGPF | T.ALA.PR.G | ATGAF

AltaGas Ltd. is a Canada-based energy infrastructure company that connects natural gas and natural gas liquids (NGLs) to domestic and global markets. The Company’s segments include Utilities and Midstream. Its Utilities segment owns and operates franchised, rate-regulated natural gas distribution and storage utilities, which includes four utilities that operate across five United States jurisdictions. It Utilities segment also includes storage facilities and contracts for interstate natural gas transportation and storage services, as well as the affiliated retail energy marketing business. Its Midstream segment includes global exports, which includes its two LPG export terminals; natural gas gathering and extraction, and fractionation and liquids handling. Its Midstream segment also consists of natural gas and NGL marketing business, domestic logistics, trucking and rail terminals, and liquid storage capability. Its subsidiaries include Wrangler 1 LLC, WGL Holdings, Inc. and others.


TSX:ALA - Post by User

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Post by retiredcfon Mar 11, 2024 9:58am
329 Views
Post# 35926169

TD Report

TD Report

AltaGas Ltd.

(ALA-T) C$28.97

Q4/23 Results

 

Event

AltaGas Ltd. (ALA) Q4/23 AFFO/share of $1.20 was in line with our estimate of $1.20,

and above the Q4/22 AFFO/share of $1.17. ALA reported Q4/23 normalized EBITDA

of $502mm, which was above our estimate of $496mm, the recent consensus of

$500mm, and Q4/22 comparable EBITDA of $454mm.
 

Impact: NEUTRAL
 

Q4/23 Results: Q4/23 results were in line with our estimates, as performance across

the Midstream and Utilities segments were largely in line with our forecasts and the

stronger-than-expected Corporate performance driven by lower G&A and employee

costs was offset by higher-than-expected maintenance capital. Relative to Q4/22,

the Midstream segment benefited from stronger volumes and pricing, as well as

AFUDC on MVP, while higher margins in the retail business, lower operating and

administrative costs, and rate-base growth drove higher y/y Utilities results.

2024 Guidance Reiterated: ALA reiterated its 2024 guidance ranges for normalized

EBITDA of $1.68bln-$1.78bln and normalized EPS guidance range of $2.05-$2.25.
 

Project and Commercial Updates: ALA has integrated the Pipestone assets

and related employees following the close of the transaction in December 2023.

The company also brought into service two VLGCs—the Boreal Pioneer and the

Boreal Voyager—in December 2023 and February 2024, respectively. Management

continues to work towards an FID for its REEF project, which is expected in Q2/24.

ALA noted that the MVP pipeline is 99% complete and is expected to be in-service

in Q2/24.
 

Financial Forecasts Updated: We have updated our financial forecasts to largely

reflect Q4/23 results. We have also rolled forward our target valuation to be fully

based off our 2025 forecasts. When combined with our updated outlook, our target

price increases two dollars to $34.00.
 

TD Investment Conclusion

We believe the likely sale of MVP in 2024 and potential FID of REEF in Q2/24 would

be significant milestones in executing ALA's strategy. ALA's midstream business

continues to provide WCSB producers differentiated access to LPG exports off the

west coast, and the medium-term utility rate-base growth outlook is positive, in

our view. We believe the company is providing a diversified energy infrastructure

investment opportunity to investors with a medium-risk tolerance looking for above-

utility-average potential returns.

 
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