RBC Capital Markets lifted maintained its outperform rating on the shares of South Bow (SOBO.TO, SOBO) while raising its price target to C$49.00 from $48.00 after the pipeline company released its first-quarter results.
While South Bow's highly contracted cash flows on the Keystone Pipeline continue to form the foundation of the company's stock investment thesis, Analyst Maurice Choy said the tailwinds associated with the Middle East conflict may see the company deliver a stronger financial performance than currently assumed by the market.
RBC awaits South Bow's decision on the proposed Prairie Connector project, which can offer a material step-up in the company's growth profile, subject to having appropriate last mile risk protection," Choy said.
The company's deleveraging trajectory and attractive dividend offering also remain intact, RBC said.
Price: $48.43, Change: $+0.93, Percent Change: +1.96%