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Pembina Pipeline (TSE:PPL)
TSX:PPL
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Pembina Pipeline
(TSX:PPL)77Outperform
Positive Factors
Financial Performance
Strong Q4/24 results with a record $1,254M adj. EBITDA, well above consensus $1,128M.
Growth Strategy
PPL unveiled a suite of potential new organic-growth projects not yet in valuation, including gas power for a data center, straddle plant, and de-ethanizer.
Negative Factors
Regulatory Challenges
Alliance toll review a potential headwind, as CER has initiated a review of the previously approved Alliance Pipeline tolls.
Pembina Pipeline (PPL) vs. S&P 500 (SPY)
Market Cap
$32.16B
Dividend Yield5.19%
Average Volume (3M)2.61M
Price to Earnings (P/E)18.4
Beta (1Y)0.79
Revenue Growth-19.86%
EPS Growth0.18%
CountryCA
Employees2,837
SectorEnergy
Sector Strength57
IndustryFossil Fuels
Share Statistics
EPS (TTM)3.00
Shares Outstanding580,595,000
10 Day Avg. Volume3,988,884
30 Day Avg. Volume2,608,633
Financial Highlights & Ratios
PEG Ratio102.44
Price to Book (P/B)N/A
Price to Sales (P/S)4.30
Price to Cash Flow (P/CF)9.00
P/FCF Ratio11.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$62.03Price Target Upside12.00% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
Pembina Pipeline Business Overview & Revenue Model
Company DescriptionPembina Pipeline Corp. engages in the provision of transportation and midstream services. It operates through the following segment: Pipelines, Facilities, Marketing and New Ventures, and Corporate. The Pipelines segment includes conventional, oil sands and transmission pipeline systems, crude oil storage and terminalling business and related infrastructure. The Facilities segment consists of processing and fractionation facilities and related infrastructure that delivers the firm's customers with natural gas and NGL services. The Marketing and New Ventures segment undertakes value-added commodity marketing activities including buying and selling products and optimizing storage opportunities. The company was founded on September 29, 1954 and is headquartered in Calgary, Canada.
How the Company Makes MoneyPembina Pipeline Corporation generates revenue through a diversified business model that includes fee-based earnings from its pipeline transportation services, midstream processing, and storage solutions. The company charges fees for the transportation of crude oil, natural gas, and NGLs across its pipeline network, which is often underpinned by long-term contracts with producers and shippers. In addition to transportation fees, Pembina earns income from processing and fractionation services, where it separates and processes NGLs into marketable products. The company also capitalizes on its storage facilities, providing storage solutions for producers and marketers. Its revenue streams are further enhanced by strategic partnerships and joint ventures, which expand its service offerings and geographic reach, contributing to a stable and growing financial performance.
Pembina Pipeline Financial Statement Overview
Summary
Pembina Pipeline shows solid financial health despite recent revenue declines. The company maintains strong profitability and efficient cash flow generation, supported by a stable balance sheet. Continued revenue growth will be crucial for sustaining financial stability.Income Statement
Pembina Pipeline shows a strong gross profit margin with consistent EBIT and EBITDA margins, indicating efficient cost management. However, the company experienced a significant revenue decline from 2022 to 2023, affecting overall revenue growth negatively. Net profit margin remains robust, reflecting solid profitability.78
Positive
Balance Sheet
The company's debt-to-equity ratio remains manageable, indicating a balanced capital structure, although there was an increase in total debt. Return on Equity (ROE) is strong, signifying effective use of equity to generate profits. The equity ratio is stable, demonstrating solid financial foundation and asset management.72
Positive
Cash Flow
Operating cash flow has consistently covered net income, with a healthy free cash flow that supports future investments and debt repayments. The free cash flow growth rate has been positive, highlighting efficient cash management and operational efficiency.81
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.38B | 9.13B | 11.61B | 8.63B | 6.20B | Gross Profit |
| 3.32B | 2.84B | 3.12B | 2.65B | 2.01B | EBIT |
| 2.28B | 2.65B | 2.60B | 2.12B | 1.78B | EBITDA |
| 3.18B | 3.01B | 4.00B | 2.55B | 418.00M | Net Income Common Stockholders |
| 1.86B | 1.78B | 2.97B | 1.24B | -316.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 141.00M | 137.00M | 94.00M | 43.00M | 81.00M | Total Assets |
| 35.97B | 32.62B | 31.48B | 31.46B | 31.42B | Total Debt |
| 13.32B | 11.14B | 11.28B | 11.96B | 11.65B | Net Debt |
| 13.18B | 11.01B | 11.18B | 11.92B | 11.57B | Total Liabilities |
| 18.46B | 16.80B | 15.69B | 17.09B | 16.40B | Stockholders Equity |
| 17.51B | 15.81B | 15.73B | 14.30B | 14.96B |
| Cash Flow | Free Cash Flow | |||
| 2.26B | 2.03B | 2.32B | 1.99B | 1.22B | Operating Cash Flow |
| 3.21B | 2.63B | 2.93B | 2.65B | 2.25B | Investing Cash Flow |
| -3.91B | -789.00M | -154.00M | -1.04B | -1.48B | Financing Cash Flow |
| 678.00M | -1.80B | -2.72B | -1.67B | -809.00M |
Pembina Pipeline Technical Analysis
Positive
55.39
Price Trends
52.80
Positive
54.87
Positive
53.10
Positive
Market Momentum
0.46
Negative
65.97
Neutral
83.34
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:PPL, the sentiment is Positive. The current price of 55.39 is above the 20-day moving average (MA) of 52.59, above the 50-day MA of 52.80, and above the 200-day MA of 53.10, indicating a bullish trend. The MACD of 0.46 indicates Negative momentum. The RSI at 65.97 is Neutral, neither overbought nor oversold. The STOCH value of 83.34 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:PPL.
Pembina Pipeline Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Performance Comparison
TSE:PPL
Pembina Pipeline
54.06
8.39
18.37%
ENB
Enbridge
42.00
8.24
24.41%
TRP
TC Energy
45.88
11.13
32.03%
GBNXF
Gibson Energy
14.73
-0.91
-5.82%
ATGFF
AltaGas
25.87
5.06
24.32%
TSE:KEY
Keyera Corp.
39.80
7.52
23.30%
Pembina Pipeline Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 5.48% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Pembina's strong financial performance and strategic growth initiatives, including record adjusted EBITDA and cash flows, successful acquisitions, and new project announcements. However, this was slightly tempered by a decrease in fourth-quarter earnings and challenges with Cochin pipeline revenues. Overall, the positive highlights significantly outweigh the lowlights, indicating a strong position moving forward.Highlights
Record Financial Performance
Pembina reported record quarterly adjusted EBITDA of $1.254 billion and record quarterly adjusted cash flow from operating activities of $922 million. For the full year, Pembina achieved record annual adjusted EBITDA of $4.408 billion and record full-year adjusted cash flow from operating activities of $3,265 million.
Successful Strategic Acquisitions
Pembina fully consolidated ownership of Alliance and Aux Sable, which contributed to growing volumes and financial performance.
Positive Final Investment Decision on Cedar LNG
Pembina reached a positive final investment decision on the Cedar LNG project, furthering global market access for Canadian natural gas producers.
New Growth Initiatives
Pembina announced a 50% interest in the Greenlight Electricity Centre and secured sole extraction rights from the Yellowhead mainline, both of which are expected to drive future growth and integration.
Strong Contractual Success
Executed incremental contracts or renewed contracts for approximately 170,000 BOE per day of pipeline transportation and additional services across various facilities.
Dividend Increase
Pembina increased the common share dividend by 3.4% while maintaining a strong balance sheet with a debt-to-adjusted EBITDA ratio of 3.5 times.
Lowlights
Decrease in Fourth Quarter Earnings
Fourth quarter earnings decreased by 18% compared to the same period in the prior year, primarily due to unrealized losses on commodity-related derivatives and higher interest expenses.
Challenges with Cochin Pipeline
Lower net revenue on the Cochin pipeline was largely due to lower firm tolls and lower interruptible volumes during the period.
Company Guidance
During the Pembina Pipeline Corporation's fourth quarter 2024 results conference call, the company reported several key financial metrics and operational achievements. Quarterly earnings were $572 million, with record adjusted EBITDA of $1.254 billion and adjusted cash flow from operating activities reaching $922 million, or $1.59 per share. For the full year 2024, Pembina reported earnings of $1.874 billion, record annual adjusted EBITDA of $4.408 billion, and record adjusted cash flow from operating activities of $3.265 billion, or $5.70 per share. These results were attributed to successful acquisitions, growing volumes in the Western Canadian Sedimentary Basin, and a robust performance from the marketing business. Pembina also highlighted strategic initiatives such as the Phase VIII Peace Pipeline expansion and securing a 50,000 barrel per day ethane supply agreement with Dow. The company is progressing with various projects expected to enter service in 2026, including the RFS IV expansion, Wapiti plant expansion, and K3 cogeneration facility, and is planning further developments like the Greenlight Electricity Centre and a new straddle facility on the Yellowhead mainline. The call concluded with a positive outlook for 2025, underscoring Pembina's strong position in the energy sector and its continued growth prospects.Pembina Pipeline Corporate Events
Pembina Pipeline Advances Strategic Infrastructure Developments
Jan 2, 2025
Pembina Pipeline Corporation has successfully closed Pembina Gas Infrastructure’s acquisition of a 50% working interest in Whitecap Resources’ Kaybob Complex, enhancing long-term agreements that support Whitecap’s development projects. The company is advancing infrastructure development in the Karr and Gold Creek areas and is set to invest up to $400 million in the Lator area development, ensuring efficient processing and transportation of natural gas liquids. These strategic moves aim to boost the utilization of Pembina’s existing infrastructure and support future growth.
Pembina Pipeline’s 2025 Financial Outlook Sparks Interest
Dec 12, 2024
Pembina Pipeline Corporation forecasts a robust 2025 with an adjusted EBITDA between $4.2 billion and $4.5 billion, driven by asset acquisitions and volume growth in Canadian energy. The company plans a $1.1 billion capital investment, fully funded by operating cash flows, emphasizing a strategy of sustainable growth and financial stability.
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.