Credit Suisse analysts have downgraded Plains All American
Pipeline, L.P. (
) to a Neutral rating from Outperform, while raising their price
target on the stock to $62.50 from $60 a share.
"PAA reported 1Q results that crushed CS and consensus estimates
and has once again lifted its FY EBITDA outlook. However, we
believe that PAA units are fairly valued and are downgrading to
Neutral though we still forecast NTM total return potential of
8%-15%," said Credit Suisse.
"PAA took advantage of favorable basis/grade spreads to record
$3.95/bbl margins in its S&L segment. PAA specifically cited
wide Midland-Cushing, LLS-WTI, and WTI vs. Canadian spreads during
the quarter. PAA had guided to $2.83/bbl margins. However, with
spreads tightening, PAA is guiding to $1.19/bbl margins for 2Q and
$1.15/bbl for 2H:13. We are modeling $1.49/bbl for 2Q and $1.45/bbl
for 2H:13 based on the Brent-WTI futures curves."
Raising Distribution Growth Outlook to 11%
"PAA is guiding its distribution growth to approximately 9-10%
for the next few years. We are raising our outlook to a three-year
CAGR of 11% as PAA builds out its fee-based business with the
excess cash flow generated by the S&L segment."
The firm added "We are revising our 2013/2014/2015 EPU Estimates
to $3.26/$3.17/$3.39 (from $3.08/$2.88/$2.88) respectively."
Shares of PAA are up 0.53% to $58.68 in mid-day trade, after
hitting a new 52-week high of $59.17 earlier in today's
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