SOBO Stock Forecast & Price Target

South Bow Corp is positioned for a positive outlook primarily due to expectations of a significant improvement in its financial setup, potentially aligning with peer performance levels. The market may also enhance its perception of the Keystone Pipeline's asset integrity, provided it maintains an incident-free record over an extended period, potentially leading to a premium valuation. Furthermore, the company anticipates accelerated growth supported by long-term contracted cash flows from investment-grade counterparties, which positions it favorably despite an expected increase in leverage through 2025.

The negative outlook on South Bow Corp’s stock is primarily driven by a projected 7.4% decrease in Q2/25 EBITDA, now estimated at $246 million, which reflects declining performance in the company's most significant segment, the Keystone Pipeline System. Additionally, throughput on the Keystone Pipeline fell to 613,000 b/d in Q1/25, an 8,000 b/d drop from the prior quarter, indicating a reduction in uncommitted volumes that could impact future revenue generation. Furthermore, revised forecasts for 2025 and 2026 show a downward adjustment in both EBITDA and DCF/share, fueled by anticipated hedge losses and weaker EBITDA projections for the Keystone segment.