Raymond James has elevated its price target for Keyera (KEYUF, Financial) from C$50 to C$51, reaffirming its Outperform rating on the company’s stock. This adjustment indicates a positive outlook on Keyera's performance potential and future prospects. Investors continue to rely on strategic insights such as these to make informed decisions regarding their portfolios.
KEYUF Key Business Developments
Release Date: May 15, 2025
- Adjusted EBITDA: CAD298 million, down from CAD314 million in Q1 last year.
- Distributable Cash Flow: CAD190 million or $0.83 per share.
- Net Earnings: CAD130 million, up from CAD71 million in the same period last year.
- Fee-for-Service Segments Margin: Up 9% over the same period last year.
- Gathering and Processing Margin: CAD109 million with a new throughput record at Wapiti.
- Liquid Infrastructure Margin: Near-record CAD152 million.
- Marketing Segment Realized Margin: CAD78 million, primarily driven by iso-octane and propane sales.
- Net Debt to EBITDA: Two times, below the targeted range.
- Marketing Segment Realized Margin Guidance: Expected between CAD310 million and CAD350 million.
- Gross Capital Expenditures Guidance: Expected between CAD300 million and CAD330 million.
- Maintenance Capital Expenditures Guidance: Expected between CAD70 million and CAD90 million.
- Cash Taxes Guidance: Expected between CAD100 million and CAD110 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Keyera Corp (KEYUF, Financial) reported solid financial results for the first quarter, with net earnings of CAD130 million, up from CAD71 million in the same period last year.
- The company announced the sanctioning of KFS Frac III, a major expansion of their Frac complex in Fort Saskatchewan, which will increase total Frac capacity by about 60%.
- Keyera Corp (KEYUF) has secured long-term customer commitments for the Frac expansions, with a high degree of taker pay, ensuring stable future revenues.
- The company is advancing KAPS Zone 4 with commercial discussions nearing completion, indicating continued growth and expansion opportunities.
- Keyera Corp (KEYUF) maintains a strong balance sheet with a net debt to EBITDA ratio of two times, providing financial flexibility for future investments and shareholder returns.
Negative Points
- Adjusted EBITDA for the first quarter was CAD298 million, down from CAD314 million in Q1 last year, indicating a slight decline in earnings performance.
- The AEF facility experienced a maintenance outage that extended longer than anticipated, impacting the annual marketing segment realized margin by approximately CAD50 million.
- Despite strong financial performance, the company faces challenges from recent commodity market volatility, which could impact future earnings.
- The company acknowledges the need for a competitive policy environment in Canada to attract capital and enable responsible growth, indicating potential regulatory challenges.
- There is a risk of potential oversupply in the Frac capacity market by 2028, which could impact future profitability if demand does not meet expectations.
