-- Tudor, Pickering, Holt on Thursday maintained its buy rating on the shares of Pembina Pipeline (PPL.TO, PBA) with a C$65.00 price target ahead of the oil and gas infrastructure and processing company's first-quarter results.
"Lowering Q1 Adj. EBITDA by C$71MM to C$222MM versus consensus at C$253MM. The biggest drivers of the revision were (1) the timing of the PAA NGL acquisition closing and (2) adjusting our Marketing expectations in H1'26 to more accurately reflect the AEF outage and turnaround. On fee-based results for Q1, volumes improved by ~6% across KEY's G&P assets (based on data through February 2026), driving TPHe realized margin to C$119MM. However, this gain will be offset by lost AEF processing fees realized by the Liquids Infrastructure segment, resulting in net fee-based results roughly in line with Q4. On Marketing, the AEF outage came at an unfortunate time given the severe volatility in commodity prices. We currently expect realized margin of C$10MM, down from C$89MM in Q4, driven by the AEF outage and losses on hedges, which should reverse in subsequent quarters as the company sells through inventory (more of a timing issue). Despite these sizable H1'26 revisions, our FY'26 estimate only moved down C$12MM to C$1,732MM (vs. Street C$1,671MM). Our higher H2'26 outlook is predicated on the NGL acquisition closing at the end of May, stronger outright NGL pricing in H2, a robust summer iso-octane premium environment, and a more favorable frac spread. We maintain our Buy rating with a C$65/share price target," analyst AJ O'Donnell wrote.
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