This High-Yield Oil Pipeline Stock Overcame Hurricane Harvey but Still Watered Down Its Guidance
Plains All American Pipeline (NYSE: PAA) reported another mixed quarter. While the oil pipeline company's earnings rose and were slightly ahead of expectations despite a slight impact from Hurricane Harvey, the MLP reduced its full-year guidance for distributable cash flow. That said, after recently slashing its payout, it will generate more than enough cash to pay that lower rate with plenty left over for its debt reduction plan, which is good news for its investors as well as those in its majority owner Plains GP Holdings (NYSE: PAGP).
Plains All American Pipeline reported $489 million in adjusted EBITDA, which was 6% higher than last year's third quarter. Meanwhile, distributable cash flow rose 2% to $299 million, with the lower growth rate due to an increase in interest and maintenance expenses. As the following chart shows, two of its three segments improved versus the prior year:
Data source: Plains All American Pipeline. Chart by author. In millions of dollars.
Source: Fool.com
Plains All American Pipeline LP Stock
Our community is currently high on Plains All American Pipeline LP with 12 Buy predictions and 3 Sell predictions.
Based on the current price of 5.82 € the target price of 18 € shows a potential of 209.33% for Plains All American Pipeline LP which would more than double the current price.
