UBS Upgrades Plains All American (PAA) to Buy

UBS upgraded Plains All American (NYSE: PAA) from Neutral to Buy with a price target of $32.00 (from $24.00).

Analyst Shneur Gershuni commented, "PAA/PAGP are contemplating a simplification strategy, in our review of scenarios the choice by mgmnt (roll-up or roll-down) should not matter to PAA unitholders from a valuation standpoint. We believe either option alleviates some of the overhang on PAA's stock price as all outcomes resulted in higher valuations. Looking at the different scenarios, a roll-up w/ a 20% dist. cut & a roll-down w/ a ~30% cut have the most favourable valuation outcomes with a roll up modestly ahead. However we view a rolldown as most equitable, as the pay-out split b/w PAA & AAP (Plains AAP, LP) would remain the same. Mgmnt could also choose not to cut in a roll-up and issue equity."

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 $27.39 yesterday.

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