09:36 AM EST, 02/23/2022 , Tudor Pickering and Holt on Wednesday reiterated its hold rating on the shares of Gibson Energy (GEI.TO) with a C$23.00 target price after the oil infrastructure and marketing company reported fourth-quarter results that mostly met expectations and raised its dividend.

"Neutral. Gibson printed Q4 Adj. EBITDA of C$104mm, ~splitting TPH (+1%) and the Street (-1%) driven by steady Infrastructure contributions largely offset by Marketing below run-rate guidance (-60% for FY'21)," analyst Matt Taylor said in a note.

"The dividend bump of 6% (vs expectations of 3%) was a surprise in light of DCF being down 3% y/y, but a C$0.01/sh change in the quarterly dividend only equates to C$6MM per year so the increase was more driven by maintaining the DCF payout ratio at the bottom end of the 70-80% to match increased Infrastructure EBITDA (+17% y/y).

As a result of the DRU (diluent recovery unit) build-out and flat total EBITDA y/y, leverage has tracked higher and now sits at 3.5x D/EBITDA (50% hybrid equity treatment), which is more in-line with midstream peers. Given the stock trades at a ~1x 2023e EV/EBITDA premium to peers, growth will be topical on the call today due to the Trans Mountain expansion (TMX) delay until H2'23.

We expect new tankage announcements will be deferred until later this year (likely H2'22), while further DRU expansions will continue to be "wait and see" as the first phase only fully entered service in Dec'21. On Marketing, we expect a modest recovery in Q1'22 (C$10-15MM), but still below run-rate guidance of C$20-30MM per quarter as a result of continued limited opportunities."