Canadian pipeline operator South Bow Q2 revenue rises, lifts 2026 outlook

South Bow

05/08/2026 22:21

Overview
Canada pipeline operator reported Q2 revenue rose yr/yr to $546 mln
Normalized EBITDA for Q2 grew 9% from Q1 to $280 mln
Company raised 2026 normalized EBITDA and cash flow guidance after strong first-half results

Outlook
South Bow raises 2026 normalized EBITDA guidance to $1.04 bln, range +2%/-1%
Company lifts 2026 distributable cash flow guidance to $665 mln, range +/-2%
South Bow expects Q3 2026 normalized EBITDA about 10% lower than Q2's $280 mln

Result Drivers
GULF COAST DEMAND - Co said disruptions to global crude oil trade flows drove strong demand for capacity on the U.S. Gulf Coast segment of the Keystone Pipeline System
PIPELINE THROUGHPUT - Q2 average throughput was approximately 596,000 bbl/d on Keystone Pipeline and 800,000 bbl/d on the U.S. Gulf Coast segment
LONG-TERM CONTRACTS - Co secured 20-year binding commitments from nine customers totaling 465,000 bbl/d of firm transportation service

Company press release: ID:nGNX5sPqmp

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q2 Revenue
Beat
$546 mln
$483.74 mln (2 Analysts)
Q2 Normalized Net Income
 
$104 mln
 
Q2 Net Income
 
$134 mln
 
Q2 Normalized EBITDA
 
$280 mln
 
Q2 Capex
 
$18 mln
 
Q2 Pretax Profit
 
$174 mln
 

Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 10 "hold" and 4 "sell" or "strong sell"
The average consensus recommendation for the oil & gas transportation services peer group is "buy."
Wall Street's median 12-month price target for South Bow Corporation is C$48.00, about 5.8% below its August 4 closing price of C$50.94
The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 18 three months ago

Reuters Recommended Reads
Aug 5 - Western Midstream Q2 Adjusted EBITDA rises 19%, lifts 2026 outlook
Aug 5 - Delek Logistics Q2 revenue beats on higher crude volumes
Aug 3 - Hess Midstream's Q2 adjusted EBITDA beats on lower operating costs

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)