How Investors Are Reacting To Pembina Pipeline (TSX:PPL) Cedar LNG Deal And Peace Pipeline Expansion

• Pembina Pipeline recently released its 2026 financial guidance, approved a CA$200 million expansion of the Peace Pipeline System, and finalized a 12-year Cedar LNG capacity agreement with Ovintiv, all of which were announced earlier this month.
• By fully remarketing its 1.5 million-tonne Cedar LNG capacity under long-term contracts while expanding core pipelines, Pembina is reinforcing the stability and visibility of its future fee-based cash flows.
• We’ll now examine how Pembina’s long-term Cedar LNG agreement with Ovintiv may influence its existing investment narrative and risk profile.

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Pembina Pipeline Investment Narrative Recap

To own Pembina Pipeline, you need to believe in the durability of its fee-based midstream model in Western Canada and its ability to execute large projects without straining the balance sheet. The latest guidance, Peace Pipeline expansion, and full Cedar LNG capacity remarketing support the key near term catalyst of growing contracted cash flows, but they also reinforce the main risk that so much future value depends on big, long-dated projects delivering as planned.

The most relevant development here is Pembina’s 12 year Cedar LNG agreement with Ovintiv, which completes remarketing of its 1.5 million tonne capacity under long term contracts. This strengthens visibility on Cedar LNG’s fee-based contributions, but also underlines how concentrated Pembina’s growth is in a few large capital projects that will take years and significant spending before contributing fully to earnings.

Yet behind the appeal of long term, contract-backed projects, investors should be aware of the risk that...

Read the full narrative on Pembina Pipeline (it's free!)

Pembina Pipeline's narrative projects CA$8.1 billion revenue and CA$1.9 billion earnings by 2028. This requires 0.0% yearly revenue decline and about CA$0.2 billion earnings increase from CA$1.7 billion today.

Uncover how Pembina Pipeline's forecasts yield a CA$59.06 fair value, a 15% upside to its current price.

Exploring Other Perspectives

Nine Simply Wall St Community fair value estimates span from CA$31.80 to CA$165.58, showing how far apart individual views on Pembina’s worth can be. When you weigh those against Pembina’s heavy reliance on large, capital intensive projects like Cedar LNG, it becomes even more important to compare multiple viewpoints on how execution risk could influence long term returns.

Explore 9 other fair value estimates on Pembina Pipeline - why the stock might be worth 38% less than the current price!

Build Your Own Pembina Pipeline Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Pembina Pipeline research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Pembina Pipeline research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Pembina Pipeline's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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