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Over the past 12 months, Pembina Pipeline Corporation (PBA - Free Report) stock has outperformed the Zacks Oil and Gas Production and Pipelines sub-industry. It gained 32.5% compared with the sub-industry's 19% increase. This reflects the stock's higher returns relative to its sub-industry over the past year.
12-Month Share-Price Performance Comparison
Image Source: Zacks Investment Research
Pembina Pipeline operates in the energy transportation and midstream services industry through three segments: Pipelines, Facilities, and Marketing and New Ventures. Its Pipelines segment has a transportation capacity of 2.9 million barrels of oil equivalent per day, supporting the movement of energy products across North America. The Facilities segment provides transportation and storage services for natural gas, condensate and natural gas liquids. Meanwhile, the Marketing and New Ventures segment focuses on buying and selling hydrocarbons, primarily sourced from the Western Canadian Sedimentary Basin.
Let's examine the key factors that could support Pembina Pipeline's growth and the risks that investors should consider before adding the stock to their portfolios.
Growth Drivers for Pembina Pipeline Stock
Improving Earnings Outlook: Pembina Pipeline’s earnings estimates indicate continued growth, with the Zacks Consensus Estimate for 2026 earnings per share pegged at $2.20. The estimate implies year-over-year growth of 15.79%, reflecting expectations for improved earnings performance in 2026.
Image Source: Zacks Investment Research
Integrated Asset Base: Pembina Pipeline connects natural gas, crude oil, condensate and natural gas liquids through processing, pipelines, storage, fractionation and export infrastructure. This integrated network can improve customer service and market access, while growth in one commodity stream may create additional throughput and service opportunities elsewhere.
Ambitious Growth Targets: Pembina Pipeline targets 5% to 7% annual growth in fee-based adjusted EBITDA per share through 2030. Its September presentation shows a path from C$6.76 per share at the midpoint of 2026 guidance to C$8.25-C$8.90 by 2030, supported by volume growth and sanctioned projects. Delivery depends on the stated project and volume assumptions
Stronger Ethane Supply Agreements: Pembina Pipeline sanctioned the C$570 million Heartland Extraction Plant and secured a long-term agreement to supply Dow with 22,500 barrels per day of ethane. Total contracted ethane volumes rise 15% to 57,500 barrels per day, while retained propane-plus output creates additional fractionation and marketing opportunities. This supports longer-term revenue visibility.
New Opportunity in Data Center Power: Pembina Pipeline and its partners reached a final investment decision on the 932-megawatt Greenlight gas-fired power facility for a Meta Platforms (META - Free Report) data center. Management expects a stable long-term cash-flow stream and stronger natural gas demand, with potential benefits for existing processing, transportation and natural gas liquids businesses. These benefits remain forward-looking.
Key Risks for Pembina Pipeline Investors
Declining Pipeline EBITDA: PBA’s pipeline adjusted EBITDA fell 3% year over year to C$626 million. The press release attributes part of the decline to the Alliance Pipeline’s new toll structure and revenue-sharing mechanism, which offset better contracted volumes and operating performance elsewhere in the pipeline division. This decline shows pressure on a major earnings segment.
Softer Q3 Outlook: PBA expects its third-quarter adjusted EBITDA contribution to be below the second quarter because of seasonal factors, spending timing and one-time items. Higher integrity and maintenance costs add pressure, so near-term results may weaken even though full-year guidance was reaffirmed. This creates a weaker near-term comparison.
Exposure to Market Volatility: PBA expects its U.S. and Canadian fractionation-spread businesses to represent about two-thirds of marketing in 2025-2026. It has hedged 90% of third-quarter exposure but only 40% of fourth-quarter exposure, leaving results more sensitive to spread movements later in the year. This leaves some marketing results exposed to spread volatility.
Potential Delays at Cedar LNG: PBA expects Cedar LNG to begin exports in late 2028, so the project will not contribute its full intended benefits immediately. Management identified the floating vessel’s final hookup and commissioning as the key remaining unknown, leaving timing and execution risk before operations start and cash flows ramp up materially.
Regulatory and Investment Hurdles: Pembina Pipeline’s proposed West Coast oil pipeline still needs regulatory approval, competitive cost estimates and sufficient volumes to support investment. Management said these conditions would be assessed over roughly 18 months, meaning the project’s potential benefits are not yet secured earnings and could delay investment approval.
Should Investors Buy or Hold PBA Stock?
Pembina Pipeline’s earnings estimates point to continued growth, supported by its integrated asset base, long-term EBITDA per-share targets and expanded ethane supply agreement with Dow. The Greenlight gas-fired power facility also offers potential long-term cash flow opportunities. However, declining pipeline-adjusted EBITDA, a weaker near-term outlook and exposure to fractionation-spread volatility could pressure results. Delays and execution risks related to Cedar LNG and the proposed West Coast oil pipeline add further uncertainty to future growth. Given this mix of strengths and potential challenges, investors should wait for a more opportune entry point instead of adding this Zacks Rank #3 (Hold) stock to their portfolios.
On the other hand, META is a technology company that operates Facebook, Instagram, WhatsApp and Messenger while investing in artificial intelligence, digital advertising, and virtual and augmented reality technologies. META carries a Zacks Rank #3 at present.
Marathon Petroleum is valued at $133.48 billion. The company is a leading U.S. independent refiner, marketer and transporter of petroleum products, with a strong refining footprint and an extensive midstream business. Marathon Petroleum benefits from its integrated operations, strategic refining assets and diversified earnings streams across the energy value chain.
Delek US Holdings is valued at $4.56 billion. It is a diversified downstream energy company engaged in petroleum refining, renewable fuels, asphalt production and logistics operations. Delek US Holdings operates multiple refineries in the United States and is committed to delivering safe, reliable energy while investing in cleaner energy initiatives.
View the Zacks #1 Rank List
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Here's Why a Hold Strategy Makes Sense for Pembina Stock Now
Key Takeaways
Over the past 12 months, Pembina Pipeline Corporation (PBA - Free Report) stock has outperformed the Zacks Oil and Gas Production and Pipelines sub-industry. It gained 32.5% compared with the sub-industry's 19% increase. This reflects the stock's higher returns relative to its sub-industry over the past year.
12-Month Share-Price Performance Comparison
Image Source: Zacks Investment Research
Pembina Pipeline operates in the energy transportation and midstream services industry through three segments: Pipelines, Facilities, and Marketing and New Ventures. Its Pipelines segment has a transportation capacity of 2.9 million barrels of oil equivalent per day, supporting the movement of energy products across North America. The Facilities segment provides transportation and storage services for natural gas, condensate and natural gas liquids. Meanwhile, the Marketing and New Ventures segment focuses on buying and selling hydrocarbons, primarily sourced from the Western Canadian Sedimentary Basin.
Let's examine the key factors that could support Pembina Pipeline's growth and the risks that investors should consider before adding the stock to their portfolios.
Growth Drivers for Pembina Pipeline Stock
Improving Earnings Outlook: Pembina Pipeline’s earnings estimates indicate continued growth, with the Zacks Consensus Estimate for 2026 earnings per share pegged at $2.20. The estimate implies year-over-year growth of 15.79%, reflecting expectations for improved earnings performance in 2026.
Image Source: Zacks Investment Research
Integrated Asset Base: Pembina Pipeline connects natural gas, crude oil, condensate and natural gas liquids through processing, pipelines, storage, fractionation and export infrastructure. This integrated network can improve customer service and market access, while growth in one commodity stream may create additional throughput and service opportunities elsewhere.
Ambitious Growth Targets: Pembina Pipeline targets 5% to 7% annual growth in fee-based adjusted EBITDA per share through 2030. Its September presentation shows a path from C$6.76 per share at the midpoint of 2026 guidance to C$8.25-C$8.90 by 2030, supported by volume growth and sanctioned projects. Delivery depends on the stated project and volume assumptions
Stronger Ethane Supply Agreements: Pembina Pipeline sanctioned the C$570 million Heartland Extraction Plant and secured a long-term agreement to supply Dow with 22,500 barrels per day of ethane. Total contracted ethane volumes rise 15% to 57,500 barrels per day, while retained propane-plus output creates additional fractionation and marketing opportunities. This supports longer-term revenue visibility.
New Opportunity in Data Center Power: Pembina Pipeline and its partners reached a final investment decision on the 932-megawatt Greenlight gas-fired power facility for a Meta Platforms (META - Free Report) data center. Management expects a stable long-term cash-flow stream and stronger natural gas demand, with potential benefits for existing processing, transportation and natural gas liquids businesses. These benefits remain forward-looking.
Key Risks for Pembina Pipeline Investors
Declining Pipeline EBITDA: PBA’s pipeline adjusted EBITDA fell 3% year over year to C$626 million. The press release attributes part of the decline to the Alliance Pipeline’s new toll structure and revenue-sharing mechanism, which offset better contracted volumes and operating performance elsewhere in the pipeline division. This decline shows pressure on a major earnings segment.
Softer Q3 Outlook: PBA expects its third-quarter adjusted EBITDA contribution to be below the second quarter because of seasonal factors, spending timing and one-time items. Higher integrity and maintenance costs add pressure, so near-term results may weaken even though full-year guidance was reaffirmed. This creates a weaker near-term comparison.
Exposure to Market Volatility: PBA expects its U.S. and Canadian fractionation-spread businesses to represent about two-thirds of marketing in 2025-2026. It has hedged 90% of third-quarter exposure but only 40% of fourth-quarter exposure, leaving results more sensitive to spread movements later in the year. This leaves some marketing results exposed to spread volatility.
Potential Delays at Cedar LNG: PBA expects Cedar LNG to begin exports in late 2028, so the project will not contribute its full intended benefits immediately. Management identified the floating vessel’s final hookup and commissioning as the key remaining unknown, leaving timing and execution risk before operations start and cash flows ramp up materially.
Regulatory and Investment Hurdles: Pembina Pipeline’s proposed West Coast oil pipeline still needs regulatory approval, competitive cost estimates and sufficient volumes to support investment. Management said these conditions would be assessed over roughly 18 months, meaning the project’s potential benefits are not yet secured earnings and could delay investment approval.
Should Investors Buy or Hold PBA Stock?
Pembina Pipeline’s earnings estimates point to continued growth, supported by its integrated asset base, long-term EBITDA per-share targets and expanded ethane supply agreement with Dow. The Greenlight gas-fired power facility also offers potential long-term cash flow opportunities. However, declining pipeline-adjusted EBITDA, a weaker near-term outlook and exposure to fractionation-spread volatility could pressure results. Delays and execution risks related to Cedar LNG and the proposed West Coast oil pipeline add further uncertainty to future growth. Given this mix of strengths and potential challenges, investors should wait for a more opportune entry point instead of adding this Zacks Rank #3 (Hold) stock to their portfolios.
On the other hand, META is a technology company that operates Facebook, Instagram, WhatsApp and Messenger while investing in artificial intelligence, digital advertising, and virtual and augmented reality technologies. META carries a Zacks Rank #3 at present.
Key Picks
Investors interested in the energy sector might consider some better-ranked stocks, such as Marathon Petroleum (MPC - Free Report) and Delek US Holdings (DK - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Marathon Petroleum is valued at $133.48 billion. The company is a leading U.S. independent refiner, marketer and transporter of petroleum products, with a strong refining footprint and an extensive midstream business. Marathon Petroleum benefits from its integrated operations, strategic refining assets and diversified earnings streams across the energy value chain.
Delek US Holdings is valued at $4.56 billion. It is a diversified downstream energy company engaged in petroleum refining, renewable fuels, asphalt production and logistics operations. Delek US Holdings operates multiple refineries in the United States and is committed to delivering safe, reliable energy while investing in cleaner energy initiatives.