Analyst Benjamin Pham from BMO Capital maintained a Hold rating on Gibson Energy and decreased the price target to C$26.00 from C$27.00.
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Benjamin Pham has given his Hold rating due to a combination of factors influencing Gibson Energy’s current financial standing and future prospects. The company’s Q3 earnings report was seen as neutral, with a slight miss in headline EBITDA expectations, though core business segments performed well. The attractive dividend yield of approximately 7% offers some support, but the elevated leverage and payout ratios remain a concern, even though they are expected to improve as ongoing projects are completed.
Another factor contributing to the Hold rating is the less visible growth guidance for the Infrastructure segment compared to peers, which impacts the overall growth outlook. While the company is on track with its construction projects and cost-saving initiatives, the future growth and financial performance remain uncertain. The upcoming investor day is anticipated to provide further insights into the company’s capital expenditure plans and infrastructure growth, which could influence future ratings.
Pham covers the Utilities sector, focusing on stocks such as Brookfield Renewable Partners, Boralex Inc Cl A, and Capital Power. According to TipRanks, Pham has an average return of 9.3% and a 66.60% success rate on recommended stocks.
In another report released on October 20, Scotiabank also downgraded the stock to a Hold with a C$25.00 price target.