Keyera: 2024 Guidance Reflects Transition to Lower Spending, Fair Value Estimate Increases to CAD 34

Keyera’s 2024 outlook was a bit better than our expectations, primarily around capital spending. After completing the Key Access Pipeline Systems, or KAPS, in 2023, the firm is shifting to several years of reduced spending as it reaps the earnings from several years of heavy investment. Growth capital spending for 2024 is set at a midpoint of CAD 90 million, well below our already low expectations and less than half of 2023 levels. After updating our forecast, our fair value estimate increases to CAD 34 from CAD 32 per share, reflecting higher levels of free cash flow. At least for the near term over the next year or two, the projects considered are more incremental expansions to existing systems, versus larger and more expensive newbuild efforts.