South Bow Corporation research snapshot
SOBO AI stock analysis as of the August 3, 2026 data cutoff reads South Bow Corporation as a contracted liquids pipeline business that has re-rated higher but now trades above analyst consensus. The stock closed at $37.10 on July 31, 2026, up about 43% over the trailing 52 weeks, with a market capitalization near $7.73 billion, computed as $37.10 times 208.58 million shares and cross-validated across StockAnalysis.com and South Bow filings. The Q1 2026 report, released May 7, 2026, delivered revenue of $491 million, net income of $77 million, normalized EBITDA of $257 million, and distributable cash flow of $168 million, while the company reaffirmed 2026 guidance of about $1.03 billion of normalized EBITDA, roughly 90% secured through committed arrangements. Management placed the Blackrod Connection Project into commercial service on schedule, kept the $0.50 quarterly dividend, and held net debt to normalized EBITDA near 4.7 times. The stock trades at 18.31x trailing earnings and 21.00x forward earnings against a consensus average price target of $34.08 from 20 analysts, and Q2 2026 results are scheduled for August 5, 2026, after this cutoff. The AI score sits at 68 out of 100 with a rating of contracted infrastructure that carries high leverage and a payout near 99% of earnings. This page is an information tool and a research framework, not investment advice, and the forecast is a set of scenarios rather than a price promise.
Current price
$37.10 close on July 31, 2026
Market cap
$7.73 billion from 208.58 million shares
AI score
68 / 100
Rating
Contracted liquids infrastructure with a strong yield, high leverage, and a price above analyst consensus
Trend status
Neutral-to-positive: above the 50-day and 200-day moving averages after a pullback from the 52-week high
Data cutoff (updated monthly)
August 4, 2026
Informational use only. This page is not investment advice.
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | South Bow owns the Keystone Pipeline System, crude marketing, and Intra-Alberta assets that move Canadian crude to Illinois, Oklahoma, and the U.S. Gulf Coast, with TTM revenue near $1.98 billion, TTM net income near $422 million, and Q1 2026 normalized EBITDA of $257 million. | Medium-high |
| Moat | The moat is based on permitted corridors, replacement cost, customer contracts, terminal access, and operational scale rather than consumer branding or network effects, and the Keystone corridor is difficult to replicate. | High |
| Management | Management reaffirmed 2026 guidance, placed the Blackrod Connection Project into commercial service on schedule and on budget, kept the sustainable base dividend, and secured 20-year binding commitments for the Prairie Connector open season, while capital allocation is still being tested after the recent separation. | Medium |
| Financial trend | TTM revenue was $1.98 billion and TTM net income was $422 million. Q1 2026 normalized EBITDA was $257 million and distributable cash flow was $168 million, but full-year revenue declined in 2025 and FY2026 adjusted EPS consensus is about $1.76, below the FY2025 adjusted EPS of $1.97. | High |
| Valuation | The quote implies about 18.31x trailing EPS, 21.00x forward earnings, 12.77x free cash flow, and a 5.39% dividend yield, with a consensus average price target of $34.08 that is below the current price. | High |
| Technical trend | SOBO closed at $37.10 on July 31, 2026, above its 50-day and 200-day moving averages near $36.87 and $31.66 but below the 5-day and 20-day averages near $37.28 and $37.22 after a pullback from the 52-week high of $38.94, with 14-day RSI near 50 and ADX near 15. | Medium-high |
| Risk level | The main risks are pipeline integrity and the Milepost 171 remediation, a proposed $26.8 million Clean Water Act civil penalty, lower uncommitted volumes, regulatory delay, a payout near 99% of earnings, refinancing cost, project overruns, commodity marketing volatility, and long-term crude demand transition. | High |
| AI confidence | Confidence is stronger for descriptive facts and precise calculations than for forward returns or the probability of a new pipeline project, because Q2 results arrive after this cutoff and project outcomes are uncertain. | Medium-high |
| Investment certainty | The infrastructure thesis is clearer than the equity return thesis because leverage and payout commitments amplify execution and valuation risk, and the price already trades above the consensus target. | Medium-low |
SOBO AI stock forecast
The SOBO AI stock forecast uses scenario math around the July 31, 2026 close of $37.10, the FY2026 adjusted EPS consensus of $1.76, and the FY2027 estimate near $1.94. The three-scenario framework produced a bearish area near $26, a base area near $36, and a bullish area near $45 over three years, using adjusted EPS growth of -4%, 4%, and 8% and exit multiples of 15x, 18x, and 21x. These are scenarios, not price commitments.
$42 to $48
More likely if 2026 normalized EBITDA reaches the high end of the about $1.03 billion guide, committed volumes remain durable, Blackrod ramps on schedule, Prairie Connector converts its 20-year binding commitments into permits, financing, and a mid-2027 final investment decision, and adjusted EPS compounds near 8% with a 20x to 21x exit multiple.
$33 to $39
More likely if normalized EBITDA stays near the $1.03 billion guide, leverage declines only modestly from the 4.7x level, the dividend remains funded, adjusted EPS recovers from the $1.76 consensus estimate, and the market values the stock near 17x to 19x earnings.
$23 to $28
More likely if integrity work or regulatory delays reduce throughput, uncommitted capacity stays weak, interest costs pressure distributable cash flow, a payout near 99% of earnings limits flexibility, adjusted EPS declines near 4%, or the multiple contracts toward 14x to 15x.
SOBO AI technical analysis
SOBO AI technical analysis is neutral-to-positive but shows short-term cooling as of the August 3, 2026 data cutoff. The stock closed at $37.10 on July 31, 2026, above its 50-day and 200-day moving averages near $36.87 and $31.66 but below its 5-day and 20-day averages near $37.28 and $37.22 after a pullback from the 52-week high of $38.94. The 14-day RSI near 50 is neutral and the 14-day ADX near 15 signals a weak trend, so confirm each level before using it.
| Level | Value | Why it matters |
|---|---|---|
| Current price | $37.10 | StockAnalysis.com real-time quote at the July 31, 2026 close; market cap math uses 208.58 million shares outstanding. |
| 5-day moving average | $37.28 | Barchart reported the 5-day moving average near $37.28, slightly above the July 31 close, which signals near-term momentum cooled. |
| 20-day moving average | $37.22 | Barchart placed the 20-day moving average near $37.22, a minor overhead reference just above the current price. |
| Near support | $35.30 to $36.90 | The 100-day moving average near $35.34 and the 50-day moving average near $36.87 form the first support zone below the current price. |
| Deeper support | $31.60 to $32.00 | The 200-day moving average near $31.66 on StockAnalysis and Barchart is the main decision zone for the long-term trend. |
| Near resistance | $37.30 to $38.94 | The immediate upside is capped by the 52-week high of $38.94, with the 5-day and 20-day averages near $37.28 and $37.22 as minor overhead. |
| 52-week high | $38.94 | The 52-week high near $38.94 on StockAnalysis is the main overhead reference after the recent pullback from that level. |
| Momentum | RSI near 50, ADX near 15 | Barchart reported 14-day RSI near 50.04, neutral, and 14-day ADX near 14.93, which signals a weak trend rather than a strong directional move. |
| Volume | About 714,000 to 746,000 average shares | Barchart listed 20-day average volume near 746,400 shares and StockAnalysis near 713,852, useful for checking breakout and pullback quality. |
| Volatility | Moderate | Barchart reported 14-day ATR near $0.81 or 2.18% and 14-day historical volatility near 19.45%, so position sizing should account for normal midstream swings. |
| Invalidation | Close below $35.30 | A sustained close below the 100-day moving average near $35.34 would weaken the short-term setup; a close below the 200-day near $31.66 would break the long-term uptrend. |
SOBO AI trading strategy
The SOBO AI trading strategy below is a rules-based research framework, not personalized advice. It links price action to committed cash flow, throughput, integrity work, leverage, dividend funding, and project approvals, and should be paired with fresh chart data and filings.
Watch for SOBO to reclaim its 5-day and 20-day averages near $37.28 and $37.22 and to build volume on a move toward the 52-week high of $38.94, while Q2 results due August 5, 2026 confirm EBITDA guidance, throughput, dividend funding, and leverage improvement.
A failed attempt at the 52-week high or a close below $36.90 should reduce setup confidence, especially if operating cash flow or integrity disclosures weaken at the same time.
If SOBO pulls back toward $35.30 to $36.90 while committed volumes, the dividend, and net debt guidance remain intact, compare the lower quote with updated EPS, distributable cash flow, and interest costs before acting.
Do not treat every decline as cheap if it reflects a pipeline incident, a permit setback, a dividend funding problem, a broad reset in yield-sensitive infrastructure valuations, or a new legal or regulatory action such as the proposed $26.8 million Clean Water Act consent decree.
Track normalized EBITDA, distributable cash flow, dividend coverage, net debt to normalized EBITDA, Keystone throughput, the system operating factor, integrity work including Milepost 171, Blackrod ramp, Prairie Connector commitments and permitting, and capital spending.
Position sizing should reflect the 4.7x net debt to normalized EBITDA ratio, a payout near 99% of earnings, and the difference between management-defined non-GAAP cash measures and GAAP earnings.
Investment research summary
Customers pay South Bow to move crude oil from Western Canada to major U.S. delivery points and to provide related marketing, storage, and logistics services. The economic engine is a strategic corridor with long-lived infrastructure and contracted transportation commitments.
The moat comes from permitted rights of way, terminal connections, replacement cost, regulatory complexity, customer relationships, and the difficulty of building a competing cross-border liquids network. It is an infrastructure moat, not a technology or brand moat.
The thesis fails if a pipeline integrity event creates prolonged restrictions or liabilities, if the proposed $26.8 million Clean Water Act civil penalty signals broader regulatory exposure, if pricing differentials reduce uncommitted volumes, if new projects require too much capital, if debt costs rise, or if the market discounts long-term crude demand and energy-transition risk.
President and CEO Bevin Wirzba came from the TC Energy leadership team. Management has reaffirmed 2026 guidance, placed Blackrod into service on schedule and on budget, held the sustainable base dividend, and secured 20-year binding commitments for Prairie Connector. The key test is whether growth can be funded without compromising leverage or safety.
Canadian crude supply is expected to grow modestly in 2026 while remaining below total pipeline egress capacity, supporting the value of reliable export routes. Prairie Connector secured 20-year binding commitments in May 2026, but a final investment decision remains targeted for mid-2027 and depends on permits, government assurances, financing, and cost control. The longer-term counterforce is oil demand transition.
At $37.10, SOBO trades near 18.31x trailing EPS, 21.00x forward earnings, and 12.77x free cash flow, while the indicated dividend yield is about 5.39%. The consensus average price target is $34.08, below the current price, so the margin of safety is thinner when the payout is near 99% of earnings and net debt is about 4.7x normalized EBITDA.
Source-backed data
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| Current price reference | $37.10 close on July 31, 2026, down 0.86% on the day | StockAnalysis.com real-time quote | August 3, 2026 |
| Market capitalization | $7.73 billion, computed as $37.10 x 208.58 million shares outstanding | StockAnalysis.com quote and share statistics | August 3, 2026 |
| Shares outstanding | 208.58 million shares, up 0.13% year over year, with 208.19 million in the float | StockAnalysis.com share statistics | August 3, 2026 |
| Q1 2026 financial results | $491 million revenue, $77 million net income, $257 million normalized EBITDA, and $168 million distributable cash flow | South Bow Q1 2026 earnings release | August 3, 2026 |
| Q1 2026 operational results | Keystone average throughput of about 616,000 bbl/d, System Operating Factor of 95%, and U.S. Gulf Coast segment throughput of about 709,000 bbl/d | South Bow Q1 2026 earnings release | August 3, 2026 |
| 2026 guidance | Normalized EBITDA of about $1.03 billion within a range of 2%, about 90% secured through committed arrangements, distributable cash flow of $655 million plus or minus 2%, financial charges of $315 million plus or minus 2%, and an effective tax rate of 22% to 23% | South Bow Q1 2026 earnings release | August 3, 2026 |
| Blackrod Connection Project | Placed into commercial service during Q1 2026 on schedule, on budget, and with a zero recordable case rate, expected to contribute about $10 million of normalized EBITDA in 2026 with cash flows increasing through the second half of 2026 and into 2027 | South Bow Q1 2026 earnings release | August 3, 2026 |
| Leverage and net debt | Net debt of $4.738 billion as of March 31, 2026, with net debt to normalized EBITDA of 4.7 times and total long-term debt of $5.751 billion; the Q1 2026 earnings release uses 50% equity treatment of the junior subordinated notes in its net debt definition | South Bow Q1 2026 earnings release | August 3, 2026 |
| Balance sheet | Cash and cash equivalents of $599 million, total debt of about $5.78 billion, net cash of minus $5.18 billion, and book value of $2.66 billion or $12.76 per share, under S&P Global classification via StockAnalysis.com | StockAnalysis.com balance sheet | August 3, 2026 |
| TTM financial results | TTM revenue of $1.98 billion down 4.6%, TTM net income of $422 million up 44.5%, and TTM EPS of $2.02 up 44.2% | StockAnalysis.com overview and statistics | August 3, 2026 |
| FY2025 results | Revenue of $1.986 billion, down 6.32% from $2.120 billion in FY2024, and net income of $433 million, up from $316 million in FY2024 | StockAnalysis.com financials | August 3, 2026 |
| Segment revenue, TTM | Keystone Pipeline System segment revenue of about $1.60 billion, Marketing segment revenue of about $358 million, and Intra-Alberta and Other revenue of about $19 million | StockAnalysis.com revenue by segment | August 3, 2026 |
| Valuation check | 18.31x trailing PE, 21.00x forward PE, 3.91x sales, 2.90x book value, 12.77x free cash flow, and 13.51x EV/EBITDA | StockAnalysis.com statistics | August 3, 2026 |
| Dividend | Annual dividend of $2.00 per share, 5.39% yield, $0.50 per quarter, payout ratio near 99%, last ex-dividend date June 30, 2026 | StockAnalysis.com dividend data | August 3, 2026 |
| Analyst consensus | Hold consensus across 20 analysts with an average price target of $34.08, low of $31 and high of $39, which is about 8.14% below the current price | StockAnalysis.com forecast | July 24, 2026 |
| Recent analyst target updates, July 2026 | RBC Capital Buy at $35 on July 24, Jefferies Buy raised to $41 from $40 on July 22, Scotiabank Hold raised to $39 from $36 on July 21, BMO Hold at $35 on July 17, and TD Cowen Hold raised to $38 from $36 on July 16 | StockAnalysis.com forecast and TheFly analyst news | July 24, 2026 |
| 2026 and 2027 consensus estimates | FY2026 revenue estimate of about $1.96 billion with adjusted EPS of $1.76, and FY2027 revenue of about $2.03 billion with adjusted EPS of $1.94 | StockAnalysis.com forecast financial forecast | July 24, 2026 |
| Short interest | 7.73 million shares short, 3.70% of shares outstanding, and 8.29 days to cover | StockAnalysis.com statistics short selling | August 3, 2026 |
| 52-week range and performance | 52-week range of $25.02 to $38.94, up 43.47% over the trailing 52 weeks, and up 35.06% year to date | StockAnalysis.com quote and statistics | August 3, 2026 |
| Clean Water Act civil penalty | The U.S. Justice Department, on behalf of the EPA and the State of Kansas, filed a complaint and proposed consent decree seeking over $26.8 million in civil penalties from South Bow LP and related parties over alleged Clean Water Act violations | TheFly coverage of the proposed consent decree | July 2026 |
| Prairie Connector commercial milestone | Successful open season closed March 30, 2026, securing 20-year binding commitments for firm transportation service from Hardisty, Alberta, to U.S. delivery points; final investment decision targeted for mid-2027, subject to permits, financing, and execution checks | South Bow successful open season announcement | August 3, 2026 |
| Q2 2026 results timing | Second-quarter 2026 financial and operational results scheduled for release after market close on August 5, 2026, after this page cutoff of August 3, 2026 | South Bow Q2 2026 timing announcement | August 3, 2026 |
| Technical snapshot | 5-day SMA near $37.28, 20-day SMA near $37.22, 50-day SMA near $36.87, 100-day SMA near $35.34, 200-day SMA near $31.66, 14-day RSI near 50.04, 14-day ADX near 14.93, and 14-day historical volatility near 19.45% | Barchart and StockAnalysis.com technical snapshots | August 3, 2026 |
This SOBO AI stock analysis is an informational research tool only. It is not investment advice, a recommendation, or a guarantee of future returns. Forecast scenarios are based on available public data as of the August 3, 2026 cutoff and can be wrong if Q2 results, throughput, integrity findings, earnings, valuation multiples, rates, debt costs, regulation, project execution, crude demand, or market conditions change.
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