South Bow downgraded to Underweight from Equal Weight at Wells Fargo

Wells Fargo downgraded South Bow (SOBO) to Underweight from Equal Weight with an unchanged price target of C$31. The firm remains bullish on the natural gas data center theme but is overall cautious on midstream in 2025, citing full valuations and expectations for range-bound commodity prices. Natural gas pipeline stocks should maintain their premium and could see potential further multiple expansion driven by higher terminal values and increased capex on high return data center growth projects, the analyst tells investors in a research note. Wells adjusted midstream ratings as part of its 2025 outlook.