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
Currently there is a rather positive sentiment for Plains All American Pipeline LP with 10 Buy predictions and 3 Sell predictions.
With a target price of 18 € there is potential for a 209.33% increase which would mean more than doubling the current price of 5.82 € for Plains All American Pipeline LP.
