"Moody's credit downgrade puts PAA in danger of losing its Investment Grade rating," making it more difficult for the company to use leverage to expand the company said Sherowski. The analyst also noted that due to a lower rig count than expected, there was larger "potential for greater volume declines."
"We like PAA's asset footprint and acknowledge its potential earnings power upside in a US crude production recovery," but to outperform the company's peers, the analyst wanted to see:
- A "resolution to its corporate structure"
- U.S. shale call visibility
- A "clear path to deleveraging"
Due to these concerns, Goldman Sachs has continued the company's inclusion on "Americas Sell List."
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