Here's Why Holding Pembina Pipeline Stock Still Makes Sense

Core Insights - Pembina Pipeline Corporation (PBA) is a prominent energy infrastructure company in Canada, focusing on pipeline systems, storage, and transportation services, with a strategy aimed at long-term sustainability and capitalizing on market demand [1] - The company has revised its 2026 financial guidance, projecting a 4% increase in fee-based adjusted EBITDA, targeting a range of C$4.1 billion to C$4.4 billion, driven by higher volumes across its diversified assets [2] - Pembina anticipates a moderate contribution from its marketing business due to fluctuating commodity prices, but overall financial outlook remains strong with significant capital investments planned [3] Financial Performance - PBA's fee-based EBITDA is expected to reach C$4.1 billion to C$4.4 billion in 2026, supported by increased volumes across its assets [8] - The growth outlook is contingent on sustained producer activity and volume growth in the Western Canadian Sedimentary Basin (WCSB) [8] - The marketing segment's earnings may soften in 2026, although hedging strategies provide some protection against price volatility [11] Market Risks - The Cedar LNG project is a multi-year capital endeavor with operational risks, not expected to be operational until late 2028, leading to significant capital outflows [5] - PBA has underperformed compared to the Oil & Gas Production and Pipelines sub-industry and the broader oil and energy sector, with a decline of 4.9% over the past three months [6] - The Greenlight Electricity Center has not yet reached a final investment decision, adding uncertainty to future growth [9] Core Strengths - Pembina's proactive hedging strategy covers approximately 30% of its frac spread exposure for the first half of 2026, providing cash flow stability [11] - The company offers a unique integrated service across multiple commodities, positioning it to capture a larger share of volume growth in the basin [12] - Pembina has demonstrated strong commercial success in its core pipeline business, renewing contracts totaling over 200,000 barrels per day of capacity [13] - The company has a solid track record of executing major capital projects on time and within budget, enhancing credibility with customers and investors [14]