Q: May i have a deep review of the this stock going forward please. Stock has dropped a lot lately and some are saying their debt may cause further downside. Cheers
5i Research Answer:
Keyera trades at 15.8X forward earnings, with a 5% yield and while the top-line is expected to decline by nearly 7% this year, they are expected to get back to growth in 2026. As of the recent quarter, KEY had $45 mln in cash and $3.84 bln in debt but interest coverage is in the 3X to 4X range. The company does $900 mln to $1 bln in operating cash flow on a trailing twelve month basis and pays $476 mln in dividends. Of course, a lot of this will look different as the Plains acquisition works its way into results. Overall it may take the comapny a bit of time to digest the purchase it did but we think things look ok here and they should be setup for growth in next few years.