With a net profit margin of 21.32%, South Bow Corporation (NYSE:SOBO) is included among the 10 Most Profitable Energy Stocks to Buy Now.
South Bow Corporation operates 3,045 miles of crude oil pipeline infrastructure, connecting Alberta crude oil supplies to US refining markets in Illinois, Oklahoma, and the Gulf Coast.
On June 9, Raymond James initiated coverage of South Bow Corporation with an ‘Outperform’ rating and a price target of C$60, indicating an upside of over 19% from the current levels.
South Bow has deferred the decision to proceed with its proposed partial revival of the Keystone XL oil pipeline until mid-2027. The company announced that it will proceed with Keystone only if it has proof that a US presidential permit is “durable”, since the project was already once cancelled in 2021 when former President Joe Biden revoked its permit.
However, Raymond James believes that the Keystone XL pipeline is an “irreplaceable long-duration asset that underpins predictable cash flows for decades”. The analyst firm also expressed confidence that the proposed 550,000 bpd Alberta-to-Wyoming pipeline, dubbed Prairie Connector, will ultimately receive a positive final investment decision and will be “a game changer”.
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