Street Calls of the Week
Investing.com - BMO Capital has reiterated its Outperform rating and C$54.00 price target on Keyera Corp. (TSX:KEY), elevating the stock to its top pick designation.
The Canadian midstream company now leads BMO’s newly introduced "Top 3 Best Idea roster," followed by Northland Power (TSX:NPI) and TransAlta (TSX:TA). This replaces BMO’s previous Top 5 ranking system.
BMO expects increasing market appreciation for Keyera’s accelerated EBITDA, free cash flow, and dividend growth profile as investors shift focus to 2026, when the Plains NGL Canada acquisition is scheduled to close in the first quarter.
The firm cites potential accretion from the Plains acquisition, which it believes could exceed current estimates due to anticipated synergies. Additional growth drivers include increasing throughput across Keyera’s existing infrastructure, particularly gas processing plants and the KAPS pipeline system.
BMO also highlights Keyera’s strong balance sheet with pro-forma debt-to-EBITDA ratio of approximately 2.9x versus a target of 2.5-3x, and notes the company trades at the lowest valuation in the Canadian midstream group at around 9x 2027 estimated EBITDA.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.