Seaport Research analyst Sunil Sibal has revised the price target for Plains All American, adjusting it from $23 to $21, while maintaining a Buy rating on the stock (PAA, Financial). Despite the lowered target, the analyst underscores the company's readiness to navigate potential downturns in operational activity. This adjustment signals a cautious yet optimistic outlook, reinforcing investor confidence in the firm's strategic positioning.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 18 analysts, the average target price for Plains All American Pipeline LP (PAA, Financial) is $21.81 with a high estimate of $25.00 and a low estimate of $18.00. The average target implies an upside of 19.76% from the current price of $18.21. More detailed estimate data can be found on the Plains All American Pipeline LP (PAA) Forecast page.
Based on the consensus recommendation from 20 brokerage firms, Plains All American Pipeline LP's (PAA, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Plains All American Pipeline LP (PAA, Financial) in one year is $15.62, suggesting a downside of 14.22% from the current price of $18.21. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Plains All American Pipeline LP (PAA) Summary page.
PAA Key Business Developments
Release Date: February 07, 2025
- Adjusted EBITDA (Q4 2024): $729 million.
- Adjusted EBITDA (Full Year 2024): $2.78 billion.
- Adjusted EBITDA Guidance (2025): $2.8 billion to $2.95 billion.
- Permian Crude Production Growth (2025): Expected to grow to 300,000 barrels a day.
- Annual Distribution Increase: $0.25 per unit, bringing the annual distribution to $1.52 per unit.
- Adjusted Free Cash Flow (2025): Approximately $1.15 billion.
- Growth Capital Investment (2025): Approximately $400 million.
- Maintenance Capital Investment (2025): Approximately $240 million.
- Senior Unsecured Notes Issuance: $1 billion at a rate of 5.95% maturing in 2035.
- Noncash Impairment (2024): $140 million related to two US NGL terminal assets.
- Insurance Claim Write-off: $225 million related to a 2022 class action settlement.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Plains All American Pipeline LP (PAA, Financial) exceeded its expectations for the fourth quarter and full year 2024, reporting adjusted EBITDA of $729 million and $2.78 billion respectively.
- The company provided a positive outlook for 2025 with an adjusted EBITDA guidance of $2.950 billion, indicating approximately 3% growth year over year.
- PAA completed strategic acquisitions, including Ironwood Midstream and the remaining interest in Midway pipeline, which are expected to enhance its integrated asset base and generate attractive returns.
- The company announced a 20% increase in its quarterly distribution, reflecting its commitment to returning capital to unit holders.
- PAA's Permian gathering joint venture continues to benefit from operational synergies and consistent producer activity, supporting high utilization rates and volume growth.
Negative Points
- PAA reported a $140 million non-cash impairment related to two US NGL terminal assets, impacting its GAAP results.
- The company faced a $225 million write-off related to an insurance claim from a 2015 incident, which was not reimbursed by insurers.
- Certain long-haul contract tariffs are expected to reset and step down in the second half of 2025, potentially impacting revenue.
- The NGL segment's adjusted EBITDA is expected to be slightly lower year over year, with a shift to approximately 45% fee-based in 2025.
- PAA's capital investments for 2025 include $400 million in growth capital and $240 million in maintenance capital, which could strain financial resources if not managed effectively.
