KAPS Timing Imperfect, But Long-Term Rationale Sound

Research evidence excerpt

KAPS Timing Imperfect, But Long-Term Rationale Sound

Canada | Midstream

Keyera EquityJuneResearch18, 2026

ESTIMATE CHANGEKAPS Timing Imperfect, But Long-Term

RATING BUYRationale Sound

PRICE C$55.96^

Acquiring the rest of KAPS is logical, as operatorship should be made easier

with full control, allowing KEY to contract and grow its integrated footprint PRICE TARGET | % TO PT C$65.00 | +16%

more efficiently. The timing and multiple paid suggest competing interest in 52W HIGH-LOW C$59.99 - C$40.09

Stonepeak's stake, but we believe this was a deal KEY needed to make. While FLOAT (%) | ADV MM (USD) 99.5% | 114.94

'27 balance sheet capacity is reduced, we think KEY's growth path is ultimately MARKET CAP C$12.8B | $9.2B

improved with 100% KAPS ownership. TICKER KEY CN ^Prior trading day's closing price unless otherwise

noted.

Timing: Given how this transaction came just two days after KEY gave its updated post-PAA

growth guidance, we suspect there was either an imminent sale process and/or inbound interest in

FY (Dec) CHANGE TO JEFe JEF vs CONS

Stonepeak's 50% stake in the KAPS pipeline. Thus, we believe this was a move KEY needed to make

2026 2027 2026 2027

quickly. Allowing another party to control the other 50% (potentially for quite a long time) would've

been a worse outcome, in our view. EPS -2% -2% -23% -11%

EBITDA +2% +4% +1% +2%

Multiple: KEY disclosed a ~11x multiple paid on 2029E EBITDA for the 50% KAPS stake. The

multiple may have embedded some competing interest in Stonepeak's stake, but ~11x is where PPL 2026 (C$) Q1A Q2 Q3 Q4 FY

trades on '29 EBITDA, and KAPS is a long-lived, fee-based growth asset. Also, the 11x is inclusive EBITDA 202.9 336.1 503.6 529.8 1,601.1

of the remaining capex for KAPS Zone 4 plus added tie-in's/laterals.