Bullboard - Stock Discussion Forum 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... see more

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TSX:ALA - Post Discussion

AltaGas Ltd > RBC

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Post by retiredcf on Nov 03, 2023 9:04am

RBC

More positive than TD. GLTA

November 3, 2023

AltaGas Ltd.
Quick Take: Directional improvement in guidance following the strong Q3/23 results

TSX: ALA | CAD 26.97 | Outperform | Price Target CAD 32.00

Sentiment: Positive

Our take

We positively view the strong Q3/23 results and the directional improvement in 2023 guidance into the "upper half" of AltaGas' EBITDA and EPS ranges. We believe the solid quarterly results provide an attractive set up for the stock into the upcoming Investor Day on December 5.

Details

Strong Q3/23 results. AltaGas reported normalized EBITDA of $252 million versus our estimate of $235 million and consensus of $242 million (nine estimates; range of $227-260 million). For normalized EPS, the company reported $0.10 for Q3/23 compared to our estimate of $0.06 and consensus of $0.07 (seven estimates; range of $0.04-0.11).

• Midstream: Segment EBITDA was $185 million versus our estimate of $155 million. • Utilities: Segment EBITDA was $71 million compared to our estimate of $79 million. • Corporate: Segment EBITDA was ($4) million versus our estimate of $2 million.

Guiding into the upper half of its 2023 ranges for EBITDA and EPS. Following the strong Q3/23 performance, the company expects to achieve full-year results in the upper half of its previously set out guidance ranges for EPS of $1.85-2.05 (we were at $1.91 heading into the Q3/23 results and consensus was at $1.92) and EBITDA of $1.5-1.6 billion (we were at $1.565 billion heading into the Q3/23 results and consensus was at $1.571 billion).

Pipestone acquisition tracking to close by the end of 2023. AltaGas has received all material regulatory approvals and is currently working on other conditions required to close the transaction. For our additional thoughts on the transaction, please click here.

Remaining focused on reducing debt/EBITDA to 4.5x. AltaGas is focused on reducing debt/EBITDA to roughly 4.5x, and the company reiterated its view that it will consider a monetization of its non-core 10% stake in the Mountain Valley Pipeline (MVP) project as part of its plan to reach 4.5x debt/EBITDA. We note that MVP's lead proponent recently disclosed that it now expects the project to come into service at the beginning of Q2/24.

Investor Day on December 5. The company will host an Investor Day in Toronto on December 5 where it intends to provide an update on its strategy and outlook, as well as its near-term and long-term priorities. AltaGas will also provide its 2024 financial guidance.

Conference Call: Today at 11:00 AM (ET)

The dial-in number is (800) 599-5188

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