Wells Fargo analyst Praneeth Satish initiated coverage of South Bow (SOBO) with an Equal Weight rating and C$28 price target The firm notes South Bow, which is being spun out of TC Energy (TRP), has high leverage and limited near-term capital return growth, but an attractive upfront yield. Wells believes investors will value South Bow as a “no growth” midstream company. On average, midstream C-Corps are currently priced to offer a 10% total return. In the absence of near-term dividend growth and buybacks, the firm views 10% as a fair yield for South Bow.
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