Tudor, Pickering, Holt on Thursday maintained its hold rating on the shares of Keyera (KEY.TO) with a C$45.00 price target following third-quarter results from the Western Canadian oil and gas infrastructure and processing company.
"Slight Positive. Q3 Adj. EBITDA was ahead of TPHe (C$318MM) and Street (C$313MM) at C$322MM. All three of KEY's segments contributed to the beat. In the G&P segment realized margin of C$99MM was slightly better than TPHe at C$95MM. Despite net processing throughput coming in below our model (1,259 vs 1,317 MMcf/d), lower opex led to higher unit margins, which accounted for the outperformance. In L&I, reported margin of C$135MM was C$6MM ahead of TPHe (C$129MM). Management cited continued strength from KAPS, as well as incremental contributions from their KFS facility from additional storage contracts. KEY continues to see strength in their Marketing business and has outperformed TPH consistently throughout '24. This quarter realized margins of C$135MM were 7% ahead of TPHe (C$126MM), with higher margins from propane, condensate, and iso-octane sales driving the beat. Despite Q3 strength, management left FY'24 guidance unchanged at C$450-C$480MM, implying a Q4 guide of C$65-C$95MM, with the midpoint of that being well below TPHe (C$108MM) and the Street (C$100MM). For capex, the company expects to be at the top-end of the C$80-C$100MM guidance range (TPHe C$82MM), with higher spending attributable to ordering long lead items for the KFS II debottlenecking project and optimization work at their Brazeau River gas plant," analyst AJ O'Donnell wrote.
(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)
Price: 44.57, Change: -0.34, Percent Change: -0.76
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