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1. Company Snapshot

1.a. Company Description

Plains GP Holdings, L.P., through its subsidiary, Plains All American Pipeline, L.P., owns and operates midstream energy infrastructure in the United States and Canada.The company operates in two segments, Crude Oil and Natural Gas Liquids (NGLs).The company engages in the transportation of crude oil and NGLs on pipelines, gathering systems, and trucks.


As of December 31, 2021, this segment owned and leased assets comprising 18,300 miles of crude oil and NGL pipelines and gathering systems; 38 million barrels of above-ground tank capacity; and 1,275 trailers.It engages in the provision of storage, terminalling, and throughput services primarily for crude oil, NGLs, and natural gas; NGL fractionation and isomerization services; and natural gas and condensate processing services.As of December 31, 2021, this segment owned and operated approximately 74 million barrels of crude oil storage capacity; 28 million barrels of NGL storage capacity; four natural gas processing plants; a condensate processing facility; nine fractionation plants; 16 NGL rail terminals; four marine facilities; and 110 miles of pipelines.


As of December 31, 2021, this segment owned 15 million barrels of crude oil and 2 NGL linefill; 3 million barrels of crude oil and 1 NGL linefill in pipelines owned by third parties and other inventory; 640 trucks and 1,275 trailers; and 3,900 NGL railcars.The company offers logistics services to producers, refiners, and other customers.PAA GP Holdings LLC operates as a general partner of the company.


Plains GP Holdings, L.P. was incorporated in 2013 and is headquartered in Houston, Texas.

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1.b. Last Insights on PAGP

Plains GP Holdings, L.P.'s recent performance was negatively impacted by a lack of recent positive news, despite its attractive valuation metrics and strong FCF generation. The company's fee-based midstream operations ensure stable cash flows, but recent market volatility and a lack of earnings beats have weighed on its performance. Additionally, the absence of any recent share buyback announcements or dividend hikes has contributed to the negative sentiment surrounding the stock.

1.c. Company Highlights

2. Plains All American: Earnings Miss and Guidance Review

The company reported fourth quarter adjusted EBITDA attributable to Plains of $738 million, and $2.833 billion for the full year 2025. The earnings report was a miss, with actual EPS coming in at $0.17 relative to estimates of $0.55. Revenue growth for the next year is estimated at 2.2% by analysts. For 2026, Plains expects to generate approximately $2.75 billion in adjusted EBITDA, representing a growth in the crude segment. The company's guidance suggests a meaningful reduction in gross spending versus 2025 levels, with maintenance capital expected to decrease following the NGL divestiture.

Publication Date: Feb -09

📋 Highlights
  • 2024 Adjusted EBITDA:: Reported $738M for Q4 and $2.833B for full-year, reflecting resilience amid geopolitical and economic challenges.
  • Strategic Transition:: Completed NGL business divestiture and EPIC pipeline acquisition (renamed Cactus III) to enhance cash flow durability and crude focus.
  • 2026 EBITDA Forecast:: Targeting $2.75B adjusted EBITDA with 13% crude segment growth, supported by stable Permian volumes (6.6M barrels/year).
  • Cost Efficiency:: Aiming for $100M in annual savings by 2027, with 50% ($50M) expected in 2026 through G&A/OpEx reductions and lower-margin exit.

Operational Highlights

Plains is transitioning to a pure-play crude company, having accelerated this transition through the sale of its NGL business and the acquisition of the EPIC pipeline, now renamed Cactus III. These transactions are expected to enhance the quality and durability of the company's cash flow stream. The acquisition of the Wild Horse Terminal in Cushing, Oklahoma, for a net cash consideration of approximately $10 million is also expected to generate returns well above internal thresholds, as noted by Jeremy L. Goebel. The terminal adds approximately 4 million barrels of storage adjacent to existing terminal assets.

Valuation and Growth Prospects

With a current P/E Ratio of 22.05 and an EV/EBITDA of 4.54, the market appears to be pricing in moderate growth expectations. The Dividend Yield stands at 7.52%, indicating an attractive return for income investors. Plains has targeted annualized distribution growth of 15¢ per unit and has recently announced a 10% increase in the quarterly distribution. The company's focus on capital discipline and its expectation of $100 million in annual savings through 2027 are positive indicators for future profitability.

Segment Performance and Outlook

The crude segment is expected to drive growth, with Permian crude production anticipated to be relatively flat year-over-year in 2026, resuming growth in 2027 driven by more constructive oil market fundamentals. Other segments, including Canada and the Rockies, are relatively stable, with opportunities for increased activity. The South Texas business is poised for growth following the integration of Ironwood and Cactus 3. Plains' diversified asset base and its efforts to optimize operations are expected to support distribution growth and improve profitability.

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.92%)

6. Segments

Crude Oil

Expected Growth: 5%

Plains GP Holdings, L.P.'s 5% growth in Crude Oil is driven by increasing global demand, particularly from Asia, and rising production in the Permian Basin. Additionally, the company's strategic pipeline infrastructure and storage capacity expansions support growing volumes. Furthermore, improving refining margins and strong export demand also contribute to the growth.

Natural Gas Liquids

Expected Growth: 4%

Plains GP Holdings, L.P.'s Natural Gas Liquids segment growth is driven by increasing demand for petrochemical feedstocks, growing exports to Asia, and strategic pipeline infrastructure investments. Additionally, the company's diversified asset base, operational efficiencies, and favorable market conditions contribute to its 4% growth rate.

Intersegment Revenues Elimination

Expected Growth: 0%

With 0% growth in Intersegment Revenues Elimination, Plains GP Holdings, L.P. is experiencing stagnant internal transactions. This may be due to stable production levels, consistent pricing, and lack of changes in internal agreements. The absence of growth suggests a steady-state operation, with no significant changes in the company's internal revenue streams.

7. Detailed Products

Crude Oil

Plains GP Holdings, L.P. is a leading transporter of crude oil, providing logistics and transportation services to oil producers and refiners.

Natural Gas Liquids (NGLs)

The company is a major transporter of NGLs, which are used as feedstocks for petrochemicals, fuels, and other products.

Refined Products

Plains GP Holdings, L.P. transports refined petroleum products, including gasoline, diesel fuel, jet fuel, and heating oil.

LPG and Other Petrochemicals

The company transports liquefied petroleum gases (LPG) and other petrochemicals, which are used as fuels, feedstocks, and in industrial processes.

8. Plains GP Holdings, L.P.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Plains GP Holdings, L.P. is medium due to the availability of alternative energy sources and the increasing adoption of renewable energy.

Bargaining Power Of Customers

The bargaining power of customers for Plains GP Holdings, L.P. is low due to the company's diversified customer base and the lack of concentration in the market.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Plains GP Holdings, L.P. is medium due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants for Plains GP Holdings, L.P. is low due to the high barriers to entry in the energy industry and the company's established position in the market.

Intensity Of Rivalry

The intensity of rivalry for Plains GP Holdings, L.P. is high due to the competitive nature of the energy industry and the presence of several major players in the market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 83.36%
Debt Cost 5.54%
Equity Weight 16.64%
Equity Cost 11.46%
WACC 6.53%
Leverage 501.10%

11. Quality Control: Plains GP Holdings, L.P. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Western Midstream Partners

A-Score: 7.8/10

Value: 5.9

Growth: 6.6

Quality: 9.0

Yield: 10.0

Momentum: 6.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Plains All American Pipeline

A-Score: 7.1/10

Value: 9.0

Growth: 3.6

Quality: 5.5

Yield: 10.0

Momentum: 5.0

Volatility: 9.3

1-Year Total Return ->

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International Seaways

A-Score: 7.0/10

Value: 6.3

Growth: 8.2

Quality: 6.9

Yield: 10.0

Momentum: 4.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Plains GP Holdings

A-Score: 6.7/10

Value: 7.6

Growth: 3.6

Quality: 5.1

Yield: 10.0

Momentum: 4.5

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
DT Midstream

A-Score: 6.5/10

Value: 3.3

Growth: 5.8

Quality: 6.4

Yield: 7.0

Momentum: 8.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
EnLink Midstream

A-Score: 4.5/10

Value: 2.5

Growth: 5.4

Quality: 2.7

Yield: 4.0

Momentum: 5.5

Volatility: 6.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

23.45$

Current Price

23.45$

Potential

-0.00%

Expected Cash-Flows