UPDATE: Morgan Stanley Resumes Coverage on Plains All American Pipeline LP with Equal-Weight Rating, $58 PT as Valuation Reflects Strong Asset Positions

In a report published Monday, Morgan Stanley analyst Stephen J. Maresca resumed coverage on

with an Equal-Weight rating and $58.00 price target. In the report, Morgan Stanley noted, “PAA is a blue chip, large-cap MLP with multiple growth platforms. We expect organic projects (Permian, Eagle Ford, Canada, Mid-Continent) to remain the primary driver of growth (PAA is guiding to organic investment of $1.600-1.725b in 2013e and $1.3-1.5b in 2014e), with strategic third party acquisitions likely used to augment growth were opportunities present themselves. We estimate distribution growth of 10.4% in 2014, 9.1% in 2015, and 6.6% in 2016 at PAA. Given a premier management team, diverse, strategically positioned assets, strong balance sheet flexibility, and solid distribution coverage, we see relatively low execution risk to this outlook. PAA trades at a yield of 4.5% and 2014e P/DCF of 18.3x vs. large-cap diversified peers at 5.2% and 16.0x, respectively. Our $58 price target implies a twelve-month total return of 18%.” Plains All American Pipeline LP closed on Friday at $51.95.