Assessing Pembina Pipeline (TSX:PPL) Valuation After Hanwha Low Carbon Power MOU Announcement

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Pembina Pipeline (TSX:PPL) is back in focus after Hanwha Power announced a non-binding MOU to explore low carbon, waste heat recovery power generation using supercritical carbon dioxide technology across Pembina’s compressor stations and gas infrastructure.

See our latest analysis for Pembina Pipeline.

The CA$68.45 share price sits against a 30 day share price return of 15.45% and a 29.22% year to date share price return. The 1 year total shareholder return of 40.02% and 5 year total shareholder return of 129.76% point to momentum that has been building over time as investors weigh projects like the Hanwha MOU alongside recent buyback activity.

If this low carbon power story has your attention, it may be a good moment to broaden your search and check out 35 power grid technology and infrastructure stocks

That recent run up, solid multi year returns, and an MOU tied to low carbon power leave a key question for you: is Pembina still trading below what it is worth, or is the market already pricing in future growth?

Most Popular Narrative: 8% Overvalued

At CA$68.45, Pembina Pipeline sits above the most followed fair value estimate of CA$63.61. This estimate is built using a 6.35% discount rate and detailed long term earnings assumptions.

Strong ongoing investments in expanding midstream and export terminal assets (notably Cedar LNG, Prince Rupert LPG terminal, and new pipeline projects) position Pembina to capture incremental volumes and diversify revenue sources, supporting both top-line growth and future EBITDA expansion.

Read the complete narrative.

Want to see what kind of revenue mix, margin profile, and future earnings multiple this narrative is baking in? The full story connects project build out, export exposure, and valuation in a way the current share price alone does not spell out.

Result: Fair Value of CA$63.61 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, you also need to keep an eye on risks like toll resets weighing on margins and large projects such as Cedar LNG, which can tie up significant capital.

Find out about the key risks to this Pembina Pipeline narrative.

Another View: Cash Flows Tell a Different Story

The analyst fair value narrative points to Pembina Pipeline trading around 8% above its CA$63.61 fair value estimate. Yet our DCF model presents a very different picture, with a future cash flow value of CA$194.98 per share, suggesting the stock is trading well below that figure. Which signal do you trust more: the earnings based target or the cash flow based model?

Story Continues

Look into how the SWS DCF model arrives at its fair value.PPL Discounted Cash Flow as at May 2026

Next Steps

With mixed signals on value and sentiment running both hot and cold, it makes sense to move quickly, review the underlying data, and weigh 2 key rewards and 2 important warning signs.

Looking for more investment ideas?

If Pembina has sharpened your thinking, do not stop here. Broaden your watchlist with a few focused stock ideas tailored to different investing priorities.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include PPL.TO.

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