South Bow initiated with a Hold at TD Securities

TD Securities last night initiated coverage of South Bow (SOBO) with a Hold rating and C$34 price target Companies with natural gas exposure and size advantages ranked best in TD’s scorecard, and should trade at the highest multiples, the analyst tells investors in a research note. The firm says the Canadian Midstream sector offers income-oriented investors low financial volatility and a growing dividend with an attractive yield. TD named Pembina its top pick in the group. South Bow’s high crude oil exposure, high financial leverage, low asset diversification, customer concentration, and lack of track record as a stand-alone public company contributed to its relative ranking, the firm contends.