South Bow Corporation 1Q in Review; Model Update

Research evidence excerpt

South Bow Corporation 1Q in Review; Model Update

J P M O R G A N North America Equity Research

14 May 2026

South Bow Corporation Underweight

SOBO, SOBO US

1Q in Review; Model Update Price (13 May 26):$36.02

▲Price Target (Dec-26):$32.00

Prior (Dec-26):$31.00

Following in-line 1Q26 results, call airtime centered on Prairie Connector;

however, management provided minimal incremental commercial commentary Head of North America Power,

Utilities, Midstream, LNG, andahead of the post-May 29th update. Notably, we see the unaffiliated Bridger

Nuclear

Pipeline presidential permit serving as a meaningful sequencing milestone for

cross-border permitting and overall project viability. Management emphasized Jeremy Tonet, CFA AC

risk allocation discipline, ensuring last-mile risk sits with parties best positioned (1-212) 622-4915

jeremy.b.tonet@jpmorgan.com

to manage it, and noted contracting strategy, cost estimates, and permitting efforts

Vrathan Reddy

across both Canada and the US remain active workstreams ahead of any FID. On

(1-212) 622-4692

Milepost 171, management guided toward a phased, segment-by-segment vrathan.reddy@jpmchase.com

pressure restriction lift beginning later in 2026, with full restoration extending into Eli Jossen, CFA

2027, targeting a return towards the ~625mbpd throughput capacity. On Blackrod, (1-212) 622-4113

SOBO confirmed commercial service in 1Q26, on schedule and on budget, with eli.jossen@jpmchase.com

cash flows ramping through 2H26. We expect 2Q26 EBITDA lands slightly above Francina Kolluri

1Q26’s $257mm on USGC demand strength, though management tempered (1-212) 270-5796

durability expectations for macro-driven Gulf Coast volume uplift into 2H26. francina.kolluri@jpmchase.com

While the update proved solid, we see SOBO as overvalued. J.P.