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Gibson Energy (TSE:GEI)
TSX:GEI
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Gibson Energy
(TSX:GEI)65Neutral
Positive Factors
Dividend
The company's quarterly dividend was raised by about 5% to $0.43 per share, which is higher than expected and implies an attractive yield of approximately 7.3%.
Negative Factors
Financial Performance
The Q4/24 EBITDA results fell short of expectations, with a significant miss driven by atypical losses in the Marketing segment.
Leadership
The departure of Senior VP & CFO Sean Brown is seen as a meaningful loss, impacting market confidence.
Gibson Energy (GEI) vs. S&P 500 (SPY)
Market Cap
$3.45B
Dividend Yield8.13%
Average Volume (3M)839.36K
Price to Earnings (P/E)22.6
Beta (1Y)0.73
Revenue Growth6.95%
EPS Growth-35.38%
CountryCA
Employees2,520
SectorEnergy
Sector Strength57
IndustryFossil Fuels
Share Statistics
EPS (TTM)0.94
Shares Outstanding163,300,000
10 Day Avg. Volume1,349,861
30 Day Avg. Volume839,364
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.30
Price to Cash Flow (P/CF)13.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$26.34Price Target Upside24.61% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Gibson Energy Business Overview & Revenue Model
Company DescriptionGibson Energy, Inc. engages in the movement, storage, blending, processing, marketing, and distribution of crude oil, condensate, natural gas liquids, water, oilfield waste, and refined products. It operates through the following segments: Infrastructure and Marketing. The Infrastructure segment includes midstream infrastructure assets comprising of oil terminals, rail loading and unloading facilities, injection stations, gathering pipelines, and processing. The Marketing segment involves in purchasing, selling, storing and optimizing of hydrocarbon products as part of supplying the Moose Jaw Facility and marketing its refined products, as well as part of supplying and driving volumes through the Company's key infrastructure assets. The company was founded in 1950 and is headquartered in Calgary, Canada.
How the Company Makes MoneyGibson Energy makes money primarily through its infrastructure and logistics operations. The company's revenue model is centered around fee-based contracts for the storage and transportation of crude oil and petroleum products. Key revenue streams include terminal and pipeline services, where Gibson Energy charges fees for the use of its storage tanks and pipeline infrastructure. Additionally, the company engages in marketing activities, buying and selling crude oil and other petroleum products to capitalize on market opportunities. Significant partnerships with major oil producers and refiners enhance Gibson's access to a steady flow of product and ensure a reliable demand for its services. The company's earnings are bolstered by long-term contracts with stable, predictable cash flows, thereby reducing exposure to volatile commodity prices.
Gibson Energy Financial Statement Overview
Summary
Gibson Energy exhibits solid financial health with growth in revenue and stable operational margins. The balance sheet shows a healthy equity base and manageable debt levels, while cash flow metrics highlight effective cash management and capital efficiency. Continued attention to cost control and income management will be essential to sustain growth in net income.Income Statement
Gibson Energy shows a strong gross profit margin with a recent increase in revenue, although net profit margin has decreased slightly over the past year. EBIT and EBITDA margins are stable, indicating consistent operational efficiency. However, the decline in net income suggests potential challenges in managing costs or other income-related factors.72
Positive
Balance Sheet
The company has a moderate debt-to-equity ratio, which suggests a balanced leverage position. Return on equity is decent, indicating the company is generating a reasonable return on shareholder investments. The equity ratio has improved, showing a stronger equity base relative to assets over time.68
Positive
Cash Flow
Gibson Energy demonstrates positive free cash flow growth, suggesting effective cash management. The operating cash flow to net income ratio is robust, reflecting good cash conversion from earnings. The free cash flow to net income ratio is also strong, indicating efficient capital expenditure management.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 11.78B | 11.01B | 11.04B | 7.21B | 4.94B | Gross Profit |
| 423.64M | 483.33M | 394.44M | 304.41M | 306.14M | EBIT |
| 344.27M | 401.61M | 355.07M | 242.58M | 247.10M | EBITDA |
| 531.78M | 535.79M | 479.15M | 416.44M | 378.56M | Net Income Common Stockholders |
| 152.17M | 214.21M | 223.25M | 145.05M | 121.31M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 57.07M | 143.76M | 83.60M | 62.69M | 53.68M | Total Assets |
| 4.97B | 4.95B | 3.19B | 3.43B | 3.07B | Total Debt |
| 2.65B | 2.77B | 1.72B | 1.74B | 1.55B | Net Debt |
| 2.59B | 2.63B | 1.63B | 1.68B | 1.50B | Total Liabilities |
| 4.00B | 4.03B | 2.62B | 2.79B | 2.39B | Stockholders Equity |
| 972.07M | 912.47M | 573.02M | 644.13M | 679.65M |
| Cash Flow | Free Cash Flow | |||
| 423.21M | 444.44M | 457.93M | 99.13M | 244.45M | Operating Cash Flow |
| 598.45M | 574.86M | 598.31M | 216.81M | 459.55M | Investing Cash Flow |
| -142.28M | -1.60B | -134.40M | -127.06M | -303.95M | Financing Cash Flow |
| -544.00M | 1.07B | -445.51M | -82.95M | -149.40M |
Gibson Energy Technical Analysis
Negative
21.14
Price Trends
24.10
Negative
23.67
Negative
22.63
Negative
Market Momentum
-0.90
Positive
23.07
Positive
27.92
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:GEI, the sentiment is Negative. The current price of 21.14 is below the 20-day moving average (MA) of 22.76, below the 50-day MA of 24.10, and below the 200-day MA of 22.63, indicating a bearish trend. The MACD of -0.90 indicates Positive momentum. The RSI at 23.07 is Positive, neither overbought nor oversold. The STOCH value of 27.92 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:GEI.
Gibson Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Performance Comparison
TSE:GEI
Gibson Energy
21.14
-0.06
-0.30%
ENB
Enbridge
42.00
8.24
24.41%
PBA
Pembina Pipeline
37.86
3.98
11.75%
TRP
TC Energy
45.88
11.13
32.03%
ATGFF
AltaGas
25.87
5.06
24.32%
TSE:KEY
Keyera Corp.
39.80
7.52
23.30%
Gibson Energy Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -10.35% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Neutral
Gibson Energy has demonstrated strong financial performance with record EBITDA and continued dividend growth, driven by strategic acquisitions and infrastructure development. However, the company faces challenges in its Marketing segment due to unfavorable market conditions and incurred significant non-recurring charges in Q4. Despite these challenges, the company's infrastructure growth and sustainability initiatives position it well for future success.Highlights
Record EBITDA Achieved
Gibson Energy achieved a record adjusted EBITDA of $610 million in 2024, marking a 3% increase over the previous year and setting a new high watermark for the company.
Dividend Increase
The company increased its quarterly dividend by $0.02 or 5% to $0.43 per share, marking the sixth consecutive dividend increase, reflecting strong financial health and commitment to shareholder value.
Gateway Acquisition Exceeds Expectations
The Gateway acquisition contributed significantly to Gibson's business, leading to record-setting volumes and positioning the company for 15% to 20% EBITDA growth by year-end 2025.
Strong Infrastructure Performance
The Infrastructure segment achieved a compound annual growth rate of approximately 14% since 2017, with adjusted EBITDA increasing by $107 million year-over-year to $601 million in 2024.
Sustainability and Safety Milestones
Gibson received its fifth consecutive CDP score of A-, and achieved 8.8 million hours without a lost time injury, demonstrating commitment to sustainability and safety.
Lowlights
Marketing Segment Underperformance
The Marketing segment saw a significant decrease in adjusted EBITDA from $145 million in 2023 to $63 million in 2024, driven by reduced opportunities in Crude Marketing and Refined Products.
Challenging Market Conditions for Marketing
Gibson expects the Marketing segment to face another challenging quarter in Q1 2025 due to steep backwardation and limited opportunities, potentially achieving only breakeven results.
Non-Recurring Infrastructure Charges
The Infrastructure segment's adjusted EBITDA in Q4 was impacted by non-recurring charges related to commercial matters, which may be partially recoverable through future resolutions.
Environmental Remediation Charge
A significant environmental remediation charge was recognized at the Edmonton terminal due to historical soil contamination, reflecting ongoing long-term remediation costs.
Company Guidance
During the Gibson Energy Fourth Quarter and Full Year 2024 Conference Call, the company provided detailed guidance on its financial and operational performance. Notably, Gibson achieved a record consolidated adjusted EBITDA of $610 million, driven primarily by its Infrastructure segment, which showed a compound annual growth rate of approximately 14% since 2017. The company's leverage ratio was reported at 3.5x, within the target range of 3x to 3.5x, and the payout ratio stood at 71%, also within the 70% to 80% target. A 5% increase in the quarterly dividend to $0.43 per share was announced, marking the sixth consecutive increase. Looking forward, Gibson plans to deploy up to $200 million in growth capital and share repurchases in 2025, with a significant portion allocated to the Gateway asset, which is expected to grow its EBITDA by over 15% to 20% by the end of 2025. Despite challenges in the Marketing segment, which contributed approximately 10% of adjusted EBITDA and ended the year below the long-term guidance, the overall strong Infrastructure performance and strategic projects like the Gateway acquisition remain key growth drivers for the company.Gibson Energy Corporate Events
Business Operations and Strategy
Gibson Energy Highlights 2024 Sustainability and Safety Milestones
Positive
Feb 26, 2025
Gibson Energy has announced its 2024 sustainability achievements, highlighting significant progress in operational management and safety, including 8.8 million hours without a lost time injury. The company has received high ratings from global agencies, reinforcing its position as a leader in sustainability within the energy sector. Gibson remains committed to safety, innovation, and strategic growth to meet global energy demands.
DividendsBusiness Operations and StrategyFinancial Disclosures
Gibson Energy Achieves Record 2024 Results Despite Marketing Segment Challenges
Positive
Feb 18, 2025
Gibson Energy reported record financial results for 2024, driven by increased throughput at its Gateway and Edmonton terminals, alongside a strategic focus on re-contracting efforts and growth projects. Despite challenges in the Marketing segment, the company achieved a 5% dividend increase, reflecting improved cash flow stability, although it faced a decrease in net income due to higher costs associated with recent acquisitions and restructuring.
Stock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
Gibson Energy Boosts Dividend Amid Strong Financial Performance
Positive
Feb 18, 2025
Gibson Energy Inc. announced a 5% increase in its quarterly dividend to $0.43 per common share, marking the sixth consecutive annual increase. This decision reflects the company’s strong cash flows and commitment to growth and shareholder returns, with plans to invest up to $200 million in growth capital and share repurchases in 2025.
Executive/Board ChangesBusiness Operations and Strategy
Gibson Energy Announces CFO Transition with Riley Hicks Taking Role
Positive
Feb 4, 2025
Gibson Energy announced the transition of its Chief Financial Officer role, with Sean Brown stepping down and Riley Hicks taking over the position. Riley Hicks, who has been with Gibson since 2018 and held various leadership roles, is expected to drive Gibson’s financial strategy forward, enhancing shareholder value and positioning the company for future successes.
Gibson Energy Sets Date for 2024 Financial Results Release
Jan 16, 2025
Gibson Energy has announced the release date for its 2024 fourth quarter and year-end financial results, scheduled for February 18, 2025. The company will discuss these results in a conference call and webcast on February 19, 2025, signaling its commitment to transparency and providing insights into its operations and financial health.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.