Seeking Alpha

Plains All American, Plains GP started with Buy ratings at Wunderlich

  • Plains All American Pipeline (PAA +1%) and Plains GP Holdings (PAGP +1.7%) are initiated with Buy ratings at Wunderlich.
  • PAA offers an attractive balance of current yield and visible near-term distribution growth, while the asset base located in a few of the most prolific U.S. basins is well positioned for long-term growth, the firm says; further, PAA's current price implies a relatively attractive market-based discount rate or annual internal rate of return of 10%.
  • The firm says PAGP, a levered play on the underlying PAA MLP, offers strong return prospects underpinned by a fee-based crude oil infrastructure business with high growth potential and tax efficient C-Corp structure.
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