PAA Should I Buy
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Plains All American Pipeline LP (PAA) is not a strong buy at the moment for a beginner investor with a long-term horizon. The technical indicators show a bearish trend, the financial performance is weak with significant YoY declines in revenue and EPS, and there are no strong proprietary trading signals or recent influential trades to support an immediate buy. While the company has positive catalysts such as cost-saving initiatives and dividend increases, the negative financial trends and mixed analyst ratings make it prudent to hold off on investing right now.
The technical indicators suggest a bearish trend. The MACD histogram is negative and expanding downward, the RSI is at 13.333 indicating oversold conditions, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading below key support levels, with the pivot at 16.959 and resistance levels at 17.635 and 18.053.
Strategic transition with divestiture of the NGL business and acquisition of the Cactus III pipeline.
Anticipated $100 million in annual cost savings by
Planned 10% increase in distributions for 2026, reflecting a shareholder-friendly approach.
Q4 2025 financials showed a 14.81% YoY revenue decline and a significant drop in EPS (-1125% YoY).
Mixed analyst ratings with recent downgrades and concerns about risk compared to peers.
Bearish technical indicators and weak short-term price trend.
The company's Q4 2025 financials were weak, with revenue dropping 14.81% YoY to $10.57 billion, net income declining 1211.54% YoY to $289 million, and EPS falling 1125% YoY to $0.41. However, gross margin improved by 57.09% YoY to 4.32.
Analyst ratings are mixed. Citi raised the price target to $20 with a Neutral rating, while Scotiabank and Mizuho have Outperform ratings with price targets of $23. BofA downgraded the stock to Underperform with a $19 price target, citing concerns about risk compared to peers.
