CIBC analyst provides top picks, earnings preview for yield-heavy energy infrastructure sector

A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web

CIBC World Markets analyst Robert Catellier provided guidance and top picks in the yield-heavy energy infrastructure sector,

“We have modified estimates for the Midstreamers under coverage to reflect colder weather in Q1/25 and lower marketing margins going forward, including frac spreads and crack spreads, largely due to concerns on tariffs. Notably, the forward curve for oil prices is approximately $10/Bbl lower since ‘Liberation Day’ and is in backwardation. We expect solid results for the regulated utilities (should meet/beat consensus), which would sustain the momentum in names that are benefiting from a flight to stability in these uncertain times. For Power companies, we expect mixed results but overall we’re biased to the downside given unfavourable weather trends and moderating power prices in key regions (e.g., Alberta). As much as we see more value and upside in the Power names, Q1 results/updates likely won’t be catalysts to help surface this value. Clarity on tariffs and U.S. clean energy policy is likely needed for a meaningful Renewables or Midstreamers sub-sector recovery. Key Points: Variances Vs. Consensus [earnings] : We’re more than 5 per cent above consensus for AQN and CWEN. We’re more than 5 per cent below for BLX, KEY, LCFS, NPI, TA, and TWM”

Mr. Catellier has buy outperform ratings on Enbridge Inc., Superior Plus Corp., Pembina Pipeline Corp., Altagas Ltd., Keyera Corp. and Gibson Energy Inc.

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Scotiabank analyst Patrick Bryden addressed the investment implications of the upcoming elections,

“Energy infrastructure. Both parties acknowledge the existential geoeconomic and geopolitical threats in the world today. Both see the need for the development of energy corridors in Canada. At the same time large scale, linear infrastructure is very difficult to build in Canada. It requires numerous layers of approvals and consultation with affected communities, and projects that are approved likely face numerous court challenges, not to mention underlying debate over what forms of energy to harness … A Liberal victory would point to market tailwinds for utilities, transmission, renewables, and nuclear. A Conservative victory would be expected to benefit oil and gas development, and therefore pipeline and midstream companies … A Liberal mandate would seek to reduce streamline major project approvals to within two years, bring heightened focus on critical minerals exploration and development, buy-Canada standards in steel, aluminum, etc., and increased focused on feedstock for battery supply chain buildouts … A Conservative mandate would bring in ‘one and done’ approvals to accelerate priority resource projects with the creation of a single Rapid Resource Project Office to streamline all regulatory approvals into one application and environmental review …Energy Infrastructure and Producers — We believe that pipeline, infrastructure and upstream oil and gas sectors stand to face the largest headwinds in the event of a liberal majority due to the following mandates:” ”

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BMO chief economist Doug Porter detailed the potential market effects arising for different election outcomes,

“The key difference is that the Liberals are leaning to more spending/investment, while the Conservatives are more focused on containing the deficit alongside slightly more tax relief … While many have highlighted some of the similarities in the proposals by the two leading parties, there are still fundamental differences in priorities. Given the political nature of the official platforms and the deep uncertainty surrounding the economic outlook, we would recommend that the fiscal projections be taken seriously, but not literally. The Liberals plan on being much more activist in supporting the economy through spending on infrastructure, housing and other programs, at the cost of a higher budget deficit. The Conservatives are more focused on controlling the deficit through spending restraint, while leaning more toward lower taxes and reduced regulation, but with less direct support for the economy and housing. Yes, they have some similar policy proposals, but the lines are thus fairly clearly drawn on the fiscal priorities

“Canadian Election 2025: The Economics” – BMO Economics

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Bluesky post of the day:

Diversion: “Shark Attacks on Humans Aren’t Always What They Seem, Scientists Say” – Gizmodo