Excerpt from BAML this morning. Target price marked to market from $27 to $25. Also, I notice the name of the former lead analyst Dennis Coleman no longer appears on their midstream reports.
Project capture to sustain elevated growth capex targets
Despite the largely challenging macro backdrop for midstream companies to reach final investment decision (FID) on future growth projects throughout 2019, we highlight that PAA has demonstrated an ability to capture new projects (Cushing Connect Pipeline, Red Oak, Red River expansion). We view PAA’s organic growth favorably and forecast growth capex of $1.4/1.4/1.0bn in 2019/20/21.
Valuation attractive; reiterate Buy
We lower our 2019/20 estimates due to more measured volume growth and tariff expectations. That said, we view the recent sell-off as largely overdone and the current valuation as favorable (~37% total return upside).