Plains All-American Pipeline LP (PAA & PAGP) Update - Apr 25
Posted: Sun Apr 25, 2021 1:31 pm
Since PAA announced Q4 2020 results and 2021 guidance in early February, 7 energy sector analysts have updated their models and price targets for the Company. Their price targets range from $10.00 to $15.50.
PAA closed at $9.24 on April 23.
Primarily due to the significant improvement in the macro business environment and rising demand for U.S. crude oil and NGLs, I have raised my valuation of PAA by $2.25 to $14.25.
> The Company has completed a multi-year capital program that sets of many years of strong operating cash flow.
> PAA now has a well-funded unit repurchase plan that will reduce outstanding units of PAA and shares of PAGP. Significantly reduces downside risk.
> DCF coverage is now more than 2X the current dividends of $0.72 (annual yield of 7.8%)
> I expect PAA and PAGP to raise their quarterly dividends in 2H 2021.
> Pre-Pandemic PAA and PAGP were trading at over $30.
PAA is an MLP and PAGP is a C-Corp. They pay the same quarterly dividends.
PAA closed at $9.24 on April 23.
Primarily due to the significant improvement in the macro business environment and rising demand for U.S. crude oil and NGLs, I have raised my valuation of PAA by $2.25 to $14.25.
> The Company has completed a multi-year capital program that sets of many years of strong operating cash flow.
> PAA now has a well-funded unit repurchase plan that will reduce outstanding units of PAA and shares of PAGP. Significantly reduces downside risk.
> DCF coverage is now more than 2X the current dividends of $0.72 (annual yield of 7.8%)
> I expect PAA and PAGP to raise their quarterly dividends in 2H 2021.
> Pre-Pandemic PAA and PAGP were trading at over $30.
PAA is an MLP and PAGP is a C-Corp. They pay the same quarterly dividends.