Plains All-American Pipeline LP (PAA) Update - Feb 10

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dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Plains All-American Pipeline LP (PAA) Update - Feb 10

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PAA's guidance for 2021
$2,150 million EBITDA
$1,290 million DCF
$1.82 DCF per common unit, which compares to current distributions of $0.18/quarter ($0.72/year).

Q4 Distributable Cash Flow (DCF) per common unit was $0.45, which compares to Q4 distributions of $0.18/unit.

Notes below from Stifel this morning

Plains All American Pipeline, L.P. (PAA, $9.28, Hold; Target $12.00) - 2021 Guidance Disappoints, FCF Generation Remains the Focus - Selman Akyol
PAA reported 4Q20 results above our estimates, which included adjusted EBITDA of $559 million compared to our $538 million estimate but well below the street. 2021 EBITDA guidance came down ~2% due to lower expectations from PAA's fee-based business. Despite the strength in crude prices, management does not anticipate any significant increase in activity near-term. While we view the Permian favorably, the basin is overbuilt from a crude oil takeaway perspective and could result in repurposing of assets longer-term. PAA plans on allocating 75% of its FCFAD towards debt reduction and 25% towards unit buybacks. As leverage approaches their target, Plains plans on increasing the weighting allocated to unit buybacks. PAA currently targets 3.0x – 3.5x leverage. Currently, we do not forecast PAA to be near its leverage target in our forecast horizon. We are maintaining our Hold rating and target price of $12.00.

Plains GP Holdings, L.P. (PAGP, $8.70, Hold; Target $12.00) - PAGP: 4Q20 Update - Selman Akyol - Plains Holdings GP, LP is a tracking stock to Plains All American Pipeline, LP (PAA, Hold, $9.28) and provides investors a 1099 option to gain exposure as opposed to PAA’s K-1 tax form. Similar to PAA, we are maintaining a Hold rating and $12.00 target price.
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PAGP is trading this morning $8.51, so annual dividend yield is 8.46%. Of the midstream companies in our High Yield Income Portfolio it may have the most exposure to liquids production growth in the Permian Basin. As oil prices move higher, so should their transportation revenues.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Plains All-American Pipeline LP (PAA) Update - Feb 10

Post by dan_s »

Raymond James: "Lowering Estimates, TP to $10 After Miss, Disappointing 2021 Guidance"

UBS Global Research: "PAGP: Still a BUY, but lowering price target from $18.0 to $16.50"
Dan Steffens
Energy Prospectus Group
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