Cautious Outlook for South Bow Corp Amid Mixed Performance and Key Incident Analysis

Jefferies analyst Sam Burwell maintained a Hold rating on South Bow Corp today and set a price target of C$37.00.

Sam Burwell has given his Hold rating due to a combination of factors surrounding South Bow Corp’s recent performance and future outlook. The company’s second-quarter results were in line with expectations, maintaining its fiscal year 2025 EBITDA guidance. However, the increase in discounted cash flow guidance, partly driven by tax changes and the inclusion of interest income, indicates a mixed outlook.
Additionally, the ongoing analysis of the Keystone Milepost 171 incident is a factor to watch, as its resolution could impact future throughput levels. While the Keystone System’s EBITDA was slightly lower than expected, the Intra-Alberta pipes performed better than anticipated. The current throughput levels are meeting contracted expectations, but the overall situation suggests a cautious approach, justifying the Hold rating.

In another report released on July 22, CIBC also maintained a Hold rating on the stock with a $26.00 price target.