The analyst community isn’t sweating the impact of the delayed launch of the Trans Mountain pipeline expansion on tank-farm giant Gibson Energy Inc. after shares of the company were battered in Tuesday’s trade.

Shares of Gibson fell more than five per cent to rank as the worst performer in the TSX energy subgroup by some margin, as investors digested how the company would fare after the pipeline expansion’s in-service date was pushed out by nine-months to the third quarter of 2023.

In a note to clients, RBC Analyst Robert Kwan said the sell-off appeared “unwarranted,” and that while Trans Mountain’s delays would have some impact on Gibson, he sees no reason for investors to panic.

“We believe that [Tuesday’s] share price weakness (stock was down over five per cent; worst performing Canadian midstream stock by over 200 basis points) is unwarranted, even if investors are concerned about the Canadian government's Trans Mountain expansion project,” he said.

Kwan is among the most bullish analysts who follow Gibson, with an “outperform” rating on shares of the company and a 12-month price target of $27.

Gibson is in the process of building out its capacity at the key Edmonton Terminal to handle the increased volumes of the new pipeline, with plans to add 435,000 barrels worth of capacity that will be in service early next year. 

While analysts say the delay could cause Gibson to push out some of its spending on the new farm, the company already indicated capital spending growth would be below average this year. Kwan said those lower spending levels could be a positive for shareholders as Gibson could deploy cash elsewhere.

“While pushing out growth from new tankage is directionally negative, we believe a lower year for capex in 2022 may increase the chances that the company moves to buy back shares, which we would view positively,” he said.

“Given recent share price weakness, we believe a share buyback program could improve the capital allocation messaging and at a minimum, help solidify the ‘floor’ value for the stock.”