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Pembina Pipelines (TSX: PPL): Earnings Preview, Fair Value, Financial Upside

Stock Markets Feb 24, 2022 14:36
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By Ketki Saxena – Major Canadian energy infrastructure player Pembina Pipeline Corp (TSX:PPL), with a market cap of $22.78B, releases its fourth-quarter 2021 earnings today after market close. 

Analysts expect EPS of $0.69 on revenue of $1.944 B, compared to EPS $0.66 on revenue of $2.149 B in the last quarter, and EPS $0.64 on revenue of $1.694 B this time last year. YTD, Pembina has delivered 8.9% total price return to shareholders. The company also recently announced a monthly dividend, with an annualized yield of 5.91%. 

As of 12:30 p.m E.T today, Pembina stock was trading at $41.39, near its 52-week high of $44.51, but down $0.49 (-1.16%) for the day, in line with the larger market sell-off related to the Russian invasion of Ukraine. 

Investing Pro models suggest a fair price target of $38.36, representing an 18.3% financial upside,

Pembina provides energy transportation and midstream services for Canadian energy, primarily through its Pipelines and Facilities segments. Its Pipeline segment operates conventional, oil sands and heavy oil, and transmission assets with a transportation capacity of 3.1 million barrels of oil equivalent per day, ground storage of 11 million barrels, and rail terminal capacity of approximately 145 thousand barrels of oil equivalent per day. 

The Facilities segment offers infrastructure that provides customers with Natural Gas Futures, condensate, and natural gas liquids, including 354 thousand barrels per day of NGL fractionation capacity, 21 million barrels of cavern storage capacity, and associated pipeline and rail terminal facilities. 

Beyond its boost by today’s Russian invasion of Ukraine, Brent Oil Futures recent break past $100 has been slowly but surely driven by solid fundamentals.

Regardless of whether the Russia-Ukraine crisis will be short-lived or painfully long-drawn-out, upstream producers will be boosting up activity, which should benefit Pembina’s midstream operations in the near future. 


Pembina Pipelines (TSX: PPL): Earnings Preview, Fair Value, Financial Upside

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