Morningstar

Morningstar, Inc.

Equity Bottom-Up

Plains reported first-quarter results that largely met our expectations, and we plan to maintain our $29.50 fair value estimate and wide moat rating. Plains bumped up its 2019 adjusted EBITDA guidance by $100 million, to $2.85 billion, with the entirety of the outperformance due to the supply and logistics segment, which is taking advantage of regional differentials in the natural gas liquids and crude oil businesses. We agree with Plains that this type of performance is unsustainable, as S&amp;L…

Plains has announced a number of updates to its financial goals, which generally align with our expectations. Broadly, the plan to lower leverage to a midpoint of 3.25 times debt/EBITDA and retain excess distributions to fund capital spending plans without issuing equity makes sense to us. We plan to maintain our $29.50 fair value estimate and wide moat rating. In our view, Plains continues to be undervalued as investors underappreciate the earnings power of its Permian assets, where we expect…

United States

Plains GP Holdings LP is a holding company. The Company, through its subsidiaries, is involved in the transportation, storage, terminalling and marketing of crude oil, refined products and LPG, as well as develops and operates natural gas storage facilities.

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