Tudor, Pickering, Holt on Wednesday reiterated its hold rating on the shares of Gibson Energy (GEI.TO) with a C$24.00 price target after the oil infrastructure and marketing company staged its annual investor-day presentations.

"GEI debuted new long-term growth targets, (1) +7% Infrastructure EBITDA/shr CAGR through 2030, and (2) 100% total shareholder return target through 2030. The company also strengthened their base business contracting profile, with two major long-term contract extensions at Edmonton (20-year refined products renewal and 10-year extension on 800k barrels of tankage) alongside the sanctioning of a ~C$50MM Wink-to-Gateway integration project expected in service by Q3'26 at a 5x build multiple. Management expects to achieve the Infrastructure growth target, comprised of +5% from growth projects (C$700MM-C$1B at 5-7x multiples) and +2% from capital-free levers (asset utilization, pricing escalators, cost discipline). The total shareholder return target will be driven by +7% Infrastructure growth, a 6.9% dividend yield, and 3-5% annual dividend growth. We were encouraged by management's conviction on the growth targets ("within control", "feel good about north of 7%"), the visibility on producer partnerships (targeting 1-2 Baytex-style deals per year), strong operational execution (cost savings target exceeded at C$25MM), and commentary that the regulatory/political environment is the best they've seen in 10 years. Their DRU expansion opportunities represent significant long-term upside if WCSB egress tightens, as well as adding a 3rd dock at Gateway (2030+). However, concerns persist around the Marketing segment, with management reiterating 2026 will look similar to 2025 at ~C$20MM (C$0-C$10MM per quarter) with the potential for isolated opportunities not likely until 2027, raising questions about whether the long-term runrate C$80-C$120MM range is still achievable," analyst AJ O'Donnell wrote.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)

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