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UPDATE: Wunderlich Initiates Plains All American Pipeline on Visible Near Term Growth

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In a report published Monday, Wunderlich Securities analyst Abhishek Sinha initiated coverage on Plains All American Pipeline, L.P. (NYSE: PAA) with a Buy rating and a $60.00 price target.

The report summary read, “We believe the units offer an attractive balance of current yield and visible near-term distribution growth, while the asset base is well positioned for long-term growth as these assets are located in a few of the most prolific basins of the US. PAA has ~$7.0billion of organic projects to propel mostly fee-based cash flows. Our $60 pricetarget and 12-month distribution forecast implies a total return potential of ~30%and results in a 4.3% target yield. Further, assuming our 10-year distribution forecast and terminal value estimate, the stock's current price implies a relatively attractive market-based discount rate or annual IRR of 10.0%.”

Some key points from the report noted: -”Visible organic growth drives the momentum.” -”Fee-based model mitigates cash flow variability.”

Plains All American Pipeline closed on Friday at $50.57.

Latest Ratings for PAA

Nov 2017Stifel NicolausMaintainsHold
Oct 2017Seaport GlobalInitiates Coverage OnNeutral
Aug 2017Bank of AmericaMaintainsNeutral

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Posted-In: Abhishek Sinha WunderlichAnalyst Color Initiation Analyst Ratings


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