Barclays Downgrades Plains All American (PAA) to Equalweight; Challenging Gas Storage Market Conditions Persist, Reducing PNG Growth Prospects

Barclays downgraded Plains All American (NYSE: PAA) from Overweight to Equalweight with a price target lowered from $23 to $19.

Barclays analyst says, "Challenging gas storage market conditions persist, reducing PNG growth prospects. Combining weak gas storage fundamentals (narrow seasonal gas price spreads and low volatility) and the lack of near-term catalysts, we are downgrading our rating and decreasing our price target."

"Our $19 price target is based on a 12-month distribution run rate of $1.43 per unit (previously $1.48) and a target yield of 7.5% (previously 6.4%). While we are lowering our growth estimates, we believe PNG's distribution growth rate will improve gradually post-2012. In addition, PNG has underlying cash flow stability from multi-year contracts and low-cost expansions, enabling it to provide and typically meet quarterly guidance, which is noteworthy in a soft storage backdrop."

For an analyst ratings summary and ratings history on Plains All American click here. For more ratings news on Plains All American click here.

Shares of Plains All American closed at $66.57 yesterday.

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