Analyst Actions: Credit Suisse Cuts Plains All American To Neutral, Raises PT $2.50; Shares Hit 52-Week Top

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Credit Suisse analysts have downgraded Plains All American Pipeline, L.P. ( PAA ) 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 session.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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This article appears in: Investing , Commodities

Referenced Stocks: PAA

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