UBS Raises Price Target on Plains All American Pipeline (PAA) to $34; Reiterates Buy
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UBS reiterated a Buy rating on Plains All American Pipeline (NYSE: PAA), and raised the price target to $34.00 (from $33.00). UBS estimates roughly $195MM of earnings uplift in PAA's transportation segment, using our Basin model and posted tariffs. UBS raised 2017/18 adjusted EBITDA estimates to $2.39/$2.64 from $2.36/$2.58B on expectations of additional Permian volumes and a widening of S&L margins.
Analyst Shneur Gershuni commented, "We continue to like PAA for its Permian exposure and think it will be one of the biggest beneficiaries from the bullish prod forecasts in the region. Notably on its CC, mgmnt noted it expects a 300Mbbl increase in the Permian next year, vs. our current basin model which calls for a 192Mbbl increase and UBS E&P Teams est of ~ 400MBbl increase. We believe that PAA's pipeline network and interconnectivity ex. gathering to refinery puts it in a good position to capture additional volumes. Further on its call mgmnt noted that both BridgeTex (50/50 JV) and Cactus can be expanded, and based on our E&Ps teams production expectations both will be needed to occur by '18."
Shares of Plains All American closed at $31.21 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
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