In a research report released Tuesday, the analysts said they continue to prefer Midstream stocks “ut keep an eye on renewable power.”
“Given favourable relative valuations, attractive financial setups (e.g., payout ratios; debt/ EBITDA), elevated commodity prices and our expectation for growth in Western Canadian oil and gas production, we continue to like Midstream stocks within Canadian Energy Infrastructure,” they said. “Following a rough 2023 and against a backdrop of moderating interest rates along with improved pricing that reflects the higher cost of capital environment, we would particularly keep an eye on well-capitalized renewable power developers. As part of our Global Power, Utilities & Infrastructure 2024 Outlook, our best Canadian stock ideas are Pembina and AltaGas (for Midstream), Northland Power (for Renewable IPPs), and Emera and TransAlta (Canadian Power and Utilities).”
While making modest forecast adjustments, the firm maintained its ratings and target prices for stocks in their coverage universe.
For their top picks, they are:
- Pembina Pipeline Corp. (
) with an “outperform” rating and $58 target. Average: $52.