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Pembina Pipeline (TSE:PPL)
TSX:PPL
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Pembina Pipeline
(TSX:PPL)
74Outperform
Positive Factors
Earnings
Strong Q4/24 results with a record $1,254M adj. EBITDA, well above consensus $1,128M.
Growth Projects
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
Guidance
The 2025 EBITDA guide was a tad soft, approximately 3% below consensus.
Regulatory Review
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
$31.34B
Dividend Yield5.08%
Average Volume (3M)3.26M
Price to Earnings (P/E)18.0
Beta (1Y)0.76
Revenue Growth-19.86%
EPS Growth0.18%
CountryCA
Employees2,997
SectorEnergy
Sector Strength46
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)3.00
Shares Outstanding580,595,000
10 Day Avg. Volume2,764,986
30 Day Avg. Volume3,257,522
Financial Highlights & Ratios
PEG Ratio99.83
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
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
$61.75Price Target Upside14.39% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Pembina Pipeline Business Overview & Revenue Model
Company DescriptionPembina Pipeline Corporation provides transportation and midstream services for the energy industry. It operates through three segments: Pipelines, Facilities, and Marketing & New Ventures. The Pipelines segment operates conventional, oil sands and heavy oil, and transmission assets with a transportation capacity of 3.1 millions of barrels of oil equivalent per day, ground storage of 11 millions of barrels, and rail terminalling capacity of approximately 105 thousands of barrels of oil equivalent per day serving markets and basins across North America. The Facilities segment offers infrastructure that provides customers with natural gas, condensate, and natural gas liquids (NGLs), including ethane, propane, butane, and condensate; and includes 354 thousands of barrels per day of NGL fractionation capacity, 21 millions of barrels of cavern storage capacity, and associated pipeline and rail terminalling facilities. The Marketing & New Ventures segment buys and sells hydrocarbon liquids and natural gas originating in the Western Canadian sedimentary basin and other basins. Pembina Pipeline Corporation was incorporated in 1954 and is headquartered in Calgary, Canada.
How the Company Makes MoneyPembina Pipeline Corporation generates revenue through several key streams. The primary source of income is from its fee-based transportation services, where the company charges customers for the volume of oil and natural gas transported through its extensive pipeline network. Additionally, Pembina earns money from its midstream services, which include processing, fractionation, and storage of natural gas liquids and other hydrocarbons. The company also derives revenue from its marketing and new ventures segment, where it buys, sells, and markets natural gas liquids and crude oil. Significant partnerships with energy producers and long-term contracts enhance revenue stability and predictability, contributing to the overall financial performance of the company.
Pembina Pipeline Financial Statement Overview
Summary
Pembina Pipeline exhibits solid financial health with strong profitability and cash flow generation. The company maintains stable operating margins and a robust balance sheet, despite a recent revenue decline.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.―
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
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.―
| 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
53.98
Price Trends
54.01
Negative
53.12
Positive
53.69
Positive
Market Momentum
-0.18
Negative
53.91
Neutral
72.95
Neutral
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 53.98 is above the 20-day moving average (MA) of 52.22, below the 50-day MA of 54.01, and above the 200-day MA of 53.69, indicating a neutral trend. The MACD of -0.18 indicates Negative momentum. The RSI at 53.91 is Neutral, neither overbought nor oversold. The STOCH value of 72.95 is Neutral, 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 (56)
Financial Indicators
Performance Comparison
TSE:PPL
Pembina Pipeline
53.98
7.38
15.85%
ENB
Enbridge
46.86
12.49
36.34%
TRP
TC Energy
50.98
18.65
57.69%
GBNXF
Gibson Energy
15.70
0.47
3.09%
ATGFF
AltaGas
29.19
7.88
36.98%
TSE:KEY
Keyera Corp.
43.26
10.27
31.13%
Pembina Pipeline Earnings Call Summary
Earnings Call Date:Feb 27, 2025
(Q4-2024)
| % Change Since: 4.08%|
Next Earnings Date:May 08, 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.Q4-2024 Updates
Positive Updates
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.
Negative Updates
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
DividendsFinancial Disclosures
Pembina Pipeline Declares Dividends and Announces Q1 2025 Results Call
Positive
Apr 8, 2025
Pembina Pipeline Corporation has declared quarterly dividends for its preferred shares, with specific payment dates set for various series. This announcement underscores Pembina’s commitment to returning value to its shareholders. Additionally, Pembina will release its first quarter 2025 results on May 8, 2025, followed by a conference call and webcast on May 9, 2025, to discuss the results with investors and stakeholders, highlighting the company’s transparency and engagement with its financial community.
Spark’s Take on TSE:PPL Stock
According to Spark, TipRanks’ AI Analyst, TSE:PPL is a Outperform.
Pembina Pipeline’s strong financial performance and strategic growth initiatives significantly contribute to its high stock score. Despite a recent revenue decline, the company maintains robust profitability and cash flow, supported by strategic acquisitions and growth projects. The technical analysis suggests near-term caution due to possible overbought conditions, while the valuation offers a balanced view with a strong dividend yield. The earnings call reinforced the company’s strong position and future growth prospects.
To see Spark’s full report on TSE:PPL stock, click here.
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.