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Barclays MLP Energy Overview: Q1 Mixed Bag

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In a report published Thursday, Barclays analysts mentioned that the Energy sector stocks, Plains All American Pipeline, L.P. (NYSE: PAA) and Plains GP Holdings LP (NYSE: PAGP), both reported a "mixed bag" of 1Q results.

Plains All American Pipeline reported 1Q DCF at $444 mm, versus the Barclays estimate of $407 mm. EBITDA came in at $622 mm, ahead of the $594 mm estimate.

Plains All American Pipeline raised its quarterly cash distribution by 8.7 percent y/y and 1.5 percent sequentially to $0.685 per unit. The company reduced its 2015 midpoint EBITDA guidance by 1 percent to $2.325B and midpoint DCF guidance by 1.5 percent to $1.615B, mostly to reflect Canadian currency headwind.

The analysts maintained an Overweight rating on Plains All American Pipeline, while reducing the price target from $60 to $58.

Plains GP Holdings reported DCF of $50 mm, modestly above the estimate. Quarterly distribution grew 9.4 percent sequentially and by 30.2 percent y/y to $0.222 per share. The company reaffirmed its 2015 distribution growth guidance of 21 percent.

The analysts maintained an Overweight rating on Plains GP Holdings and a price target of $34.

In the report Barclays noted, "While 2015 distribution coverage will be tight, we continue to believe PAA and PAGP are well positioned to navigate a low oil price environment due to a largely fee-based mix, strategically located assets, $5B growth capex 2014-15 and strong management team. We fine tune our 3-yr distribution CAGRs to 6.8% from 7.5% for PAA and 17.3% from 18.5% for PAGP…The next catalyst is the June 4 PAA/PAGP analyst day in New York."

Latest Ratings for PAA

DateFirmActionFromTo
Jan 2018BarclaysDowngradesOverweightEqual-Weight
Jan 2018Credit SuisseInitiates Coverage OnOutperform
Nov 2017Stifel NicolausMaintainsHold

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