South Bow Corporation (NYSE:SOBO) Receives Average Rating of "Reduce" from Analysts

Key Points

• Analysts have an average rating of "Reduce" on South Bow from 15 brokerages (4 sell, 8 hold, 3 buy) and the average 1‑year target price is about $30.38, below the recent share price (~$34.73).
• South Bow beat the quarter with $0.61 EPS vs. $0.40 expected and $503M revenue, showing strong margins (net margin 21.8%, ROE ~15.6%), while trading at a P/E of ~16.7 and carrying a debt/equity ratio of 2.13.
• The company pays an annualized dividend of $2.00 (a 5.8% yield), but the dividend payout ratio is very high at ~96%, which could raise sustainability concerns.

Shares of South Bow Corporation (NYSE:SOBO - Get Free Report) have been assigned an average rating of "Reduce" from the fifteen brokerages that are currently covering the stock, MarketBeat reports. Four equities research analysts have rated the stock with a sell rating, eight have assigned a hold rating and three have given a buy rating to the company. The average 1 year target price among brokers that have covered the stock in the last year is $30.3750.

SOBO has been the subject of a number of recent research reports. National Bank Financial lifted their price objective on South Bow from $29.00 to $30.00 and gave the company a "sector perform" rating in a research note on Monday, March 16th. Scotiabank lifted their price objective on South Bow from $30.00 to $34.00 and gave the company a "sector perform" rating in a research note on Friday, March 6th. Weiss Ratings upgraded South Bow from a "hold (c+)" rating to a "buy (b-)" rating in a research note on Friday, February 20th. Wolfe Research lowered South Bow from a "peer perform" rating to an "underperform" rating and set a $24.00 price objective for the company. in a research note on Wednesday, January 14th. Finally, TD Securities reiterated a "hold" rating on shares of South Bow in a research note on Friday.

Hedge Funds Weigh In On South Bow

A number of institutional investors have recently modified their holdings of the stock. Sageworth Trust Co purchased a new position in shares of South Bow during the 1st quarter valued at about $208,000. Dividend Assets Capital LLC raised its stake in shares of South Bow by 40.9% during the 1st quarter. Dividend Assets Capital LLC now owns 16,460 shares of the company's stock valued at $548,000 after buying an additional 4,774 shares during the last quarter. apricus wealth LLC raised its stake in shares of South Bow by 4.1% during the 1st quarter. apricus wealth LLC now owns 15,180 shares of the company's stock valued at $506,000 after buying an additional 600 shares during the last quarter. Cidel Asset Management Inc. purchased a new position in shares of South Bow during the 1st quarter valued at about $246,000. Finally, Purpose Unlimited Inc. purchased a new position in shares of South Bow in the 4th quarter valued at about $6,114,000.

South Bow Stock Performance

Shares of SOBO opened at $34.73 on Monday. The stock has a 50-day moving average of $32.97 and a two-hundred day moving average of $29.35. South Bow has a one year low of $24.51 and a one year high of $34.90. The company has a debt-to-equity ratio of 2.13, a quick ratio of 1.43 and a current ratio of 1.50. The stock has a market cap of $7.24 billion, a P/E ratio of 16.69 and a beta of 0.11.

South Bow (NYSE:SOBO - Get Free Report) last issued its quarterly earnings results on Thursday, March 5th. The company reported $0.61 EPS for the quarter, topping analysts' consensus estimates of $0.40 by $0.21. South Bow had a return on equity of 15.55% and a net margin of 21.80%.The company had revenue of $503.00 million during the quarter, compared to analysts' expectations of $500.57 million. During the same quarter in the previous year, the firm posted $0.54 EPS. The firm's revenue was up 3.1% compared to the same quarter last year. As a group, research analysts predict that South Bow will post 1.88 EPS for the current year.

South Bow Dividend Announcement

The business also recently disclosed a quarterly dividend, which was paid on Wednesday, April 15th. Shareholders of record on Tuesday, March 31st were paid a dividend of $0.50 per share. The ex-dividend date was Tuesday, March 31st. This represents a $2.00 dividend on an annualized basis and a dividend yield of 5.8%. South Bow's dividend payout ratio (DPR) is presently 96.15%.

About South Bow

South Bow Corp is a strategic liquids pipeline company. It is a new liquids-focused midstream infrastructure company. South Bow Corp is based in Canada.

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