Plains All American Pipeline Q1 Earnings Preview
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 49 minutes ago
0mins
Should l Buy PAA?
Source: seekingalpha
- Earnings Announcement Date: Plains All American Pipeline is set to announce its Q1 earnings on May 8 before market open, with a consensus EPS estimate of $0.42, reflecting a 7.7% year-over-year growth, indicating stability in profitability.
- Revenue Expectations: The anticipated revenue for Q1 stands at $12.02 billion, showing a modest year-over-year increase of 0.1%, which, although slight, demonstrates the company's resilience in the current market environment.
- Historical Performance: Over the past two years, PAA has beaten EPS estimates 63% of the time, but only 13% for revenue estimates, highlighting volatility in the company's revenue projections.
- Estimate Revisions: In the last three months, EPS estimates have seen one upward revision and four downward revisions, while revenue estimates experienced no upward revisions and four downward revisions, indicating a cautious market outlook on the company's future performance.
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Analyst Views on PAA
Wall Street analysts forecast PAA stock price to fall
8 Analyst Rating
3 Buy
4 Hold
1 Sell
Hold
Current: 22.170
Low
16.50
Averages
20.19
High
23.00
Current: 22.170
Low
16.50
Averages
20.19
High
23.00
About PAA
Plains All American Pipeline, L.P. owns and operates midstream energy infrastructure and provides logistics services for crude oil and natural gas liquids (NGL). It owns a network of pipeline gathering and transportation systems, in addition to terminalling, storage, processing, fractionation and other infrastructure assets serving key producing basins, transportation corridors and major market hubs and export outlets in the United States and Canada. Its Crude Oil segment operations consist of gathering and transporting crude oil using pipelines, gathering systems, trucks and, at times, on barges or railcars. Its assets provide services to third parties as well as to its merchant activities. Its NGL segment operations involve natural gas processing and NGL fractionation, storage, transportation and terminalling. NGL segment offers merchant activities including the acquisition of extraction rights from producers and/or shippers of the gas streams that pass through its Empress facility.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Plains All American Pipeline Q1 Earnings Preview
- Earnings Announcement Date: Plains All American Pipeline is set to announce its Q1 earnings on May 8 before market open, with a consensus EPS estimate of $0.42, reflecting a 7.7% year-over-year growth, indicating stability in profitability.
- Revenue Expectations: The anticipated revenue for Q1 stands at $12.02 billion, showing a modest year-over-year increase of 0.1%, which, although slight, demonstrates the company's resilience in the current market environment.
- Historical Performance: Over the past two years, PAA has beaten EPS estimates 63% of the time, but only 13% for revenue estimates, highlighting volatility in the company's revenue projections.
- Estimate Revisions: In the last three months, EPS estimates have seen one upward revision and four downward revisions, while revenue estimates experienced no upward revisions and four downward revisions, indicating a cautious market outlook on the company's future performance.
See More
Energy Transfer's Unit Price Poised for Significant Upside
- Price Surge Potential: Energy Transfer's unit price has already increased over 20% this year, nearing $20, and is expected to rise further due to higher oil prices, with a target of $25 representing a more than 25% increase.
- Earnings Growth Drivers: Although Energy Transfer does not produce oil, approximately 10% of its earnings are commodity price-linked, which are expected to rise with oil prices, while increased volumes through its liquids pipelines and marine export terminals will further boost revenue.
- LNG Project Restart Possibility: The closure of the Strait of Hormuz has disrupted global LNG supplies, prompting Energy Transfer to reconsider its Lake Charles LNG project, with potential discussions with partners that could add long-term value to its gas pipeline business.
- Valuation Upside Potential: Despite the price surge, Energy Transfer still trades at a low valuation, and as its financial position improves and expansion projects come online, the market is likely to reassess its valuation, driving it closer to peer averages.
See More
Energy Transfer's Optimistic Outlook Amid Rising Oil Prices
- Oil Price Growth Catalyst: Energy Transfer (ET) is projected to achieve earnings growth of 9% to 11.5% this year, driven by rising oil prices, particularly as potential U.S. military actions against Iran could lead to significant price spikes, enhancing the company's profitability.
- LNG Project Restart Potential: Although the Lake Charles LNG project was suspended last year, the closure of the Strait of Hormuz, disrupting 20% of global LNG supplies, may prompt Energy Transfer to find a new partner to restart the project, adding long-term value to its gas pipeline business.
- Increased Pipeline Volumes: With U.S. energy exports surging due to geopolitical tensions, Energy Transfer expects significant increases in volumes across its liquids pipelines and marine export terminals, which will drive higher fee-based income and further boost unit prices.
- Valuation Upside Anticipation: Despite a more than 20% rise in unit price this year, Energy Transfer still trades at a discount compared to large-scale energy midstream companies, suggesting that the market may soon recognize its strong financial position and growth prospects, potentially driving unit prices towards the $25 target.
See More
Persian Gulf Oil Output Plummets 57% Amid War
- Significant Output Decline: Goldman Sachs estimates that oil production from the Persian Gulf has dropped by 57% from pre-war levels, equating to a reduction of approximately 14.5 million barrels per day, which has severely impacted the global oil market and forced countries to rely on reserves to cover the shortfall.
- Emergency Stock Release: The International Energy Agency (IEA) has released a record 400 million barrels of oil, including 172 million barrels from the U.S. Strategic Petroleum Reserve (SPR), aimed at alleviating supply crises caused by the closure of the Strait of Hormuz, highlighting the urgent need for stable supply in global markets.
- Infrastructure Support: Oil pipeline companies such as Enterprise Products Partners and Enbridge are facilitating the transport of crude oil from the SPR to global markets, with their critical oil infrastructure ensuring efficient flow from storage to market, which is expected to enhance their cash flow and dividend yields.
- Optimistic Market Outlook: Due to supply issues in the Persian Gulf, these energy companies are projected to see increased volumes, boosting their cash flow and further supporting their high-yielding and steadily rising dividends, reflecting the growing importance of infrastructure in an uncertain market environment.
See More
Impact of Iran War on Global Oil Market
- Production Decline: Goldman Sachs estimates that oil production from the Persian Gulf has fallen by 57% from pre-war levels, approximately 14.5 million barrels per day, forcing the global market to draw from reserves to cover the supply shortfall.
- U.S. Strategic Reserve Release: The U.S. Department of Energy plans to release 172 million barrels from the Strategic Petroleum Reserve as part of a record release by the IEA, further mitigating the impact of the Strait of Hormuz closure.
- Infrastructure Support: The Seaway Pipeline Company, co-owned by Enterprise Products Partners and Enbridge, plays a crucial role in transporting oil from the SPR to U.S. refineries and global markets, ensuring smooth oil flow.
- Cash Flow Growth Expectations: As these energy companies play a vital role in supporting the SPR release, their volumes are expected to increase significantly, boosting cash flow and providing additional support for their high-yielding and steadily rising dividends.
See More
Iran War Fuels Growth for North American Oil Companies
- Rising Oil Prices: The Iranian attacks on oil infrastructure have effectively closed the Strait of Hormuz, leading to a sharp increase in oil prices, which is expected to drive revenue growth for North American oil companies.
- Enbridge Expansion Plans: Enbridge is set to invest CAD 28.4 billion in pipeline and terminal expansions, which is projected to increase its cash flow per share by 3% this year, allowing for continued growth in its 5.4% dividend and enhancing its market competitiveness.
- Enterprise Products Partners Investments: Enterprise Products Partners has invested billions in new pipeline systems and marine terminals, with $4.8 billion in major growth projects currently under construction, expected to support a 5.9% distribution growth, maintaining a 27-year streak of payout increases.
- Plains All American Pipeline Strategic Adjustments: Plains has optimized its pipeline portfolio through acquisitions of EPIC Crude Oil Pipelines and BridgeTex Pipeline, which is expected to drive stable cash flow growth in the future and support its 7.7% high dividend, boosting investor confidence.
See More
Plains All American Pipeline Q1 Earnings Preview
- Earnings Announcement Date: Plains All American Pipeline is set to announce its Q1 earnings on May 8 before market open, with a consensus EPS estimate of $0.42, reflecting a 7.7% year-over-year growth, indicating stability in profitability.
- Revenue Expectations: The anticipated revenue for Q1 stands at $12.02 billion, showing a modest year-over-year increase of 0.1%, which, although slight, demonstrates the company's resilience in the current market environment.
- Historical Performance: Over the past two years, PAA has beaten EPS estimates 63% of the time, but only 13% for revenue estimates, highlighting volatility in the company's revenue projections.
- Estimate Revisions: In the last three months, EPS estimates have seen one upward revision and four downward revisions, while revenue estimates experienced no upward revisions and four downward revisions, indicating a cautious market outlook on the company's future performance.
See More
Energy Transfer's Unit Price Poised for Significant Upside
- Price Surge Potential: Energy Transfer's unit price has already increased over 20% this year, nearing $20, and is expected to rise further due to higher oil prices, with a target of $25 representing a more than 25% increase.
- Earnings Growth Drivers: Although Energy Transfer does not produce oil, approximately 10% of its earnings are commodity price-linked, which are expected to rise with oil prices, while increased volumes through its liquids pipelines and marine export terminals will further boost revenue.
- LNG Project Restart Possibility: The closure of the Strait of Hormuz has disrupted global LNG supplies, prompting Energy Transfer to reconsider its Lake Charles LNG project, with potential discussions with partners that could add long-term value to its gas pipeline business.
- Valuation Upside Potential: Despite the price surge, Energy Transfer still trades at a low valuation, and as its financial position improves and expansion projects come online, the market is likely to reassess its valuation, driving it closer to peer averages.
See More
Energy Transfer's Optimistic Outlook Amid Rising Oil Prices
- Oil Price Growth Catalyst: Energy Transfer (ET) is projected to achieve earnings growth of 9% to 11.5% this year, driven by rising oil prices, particularly as potential U.S. military actions against Iran could lead to significant price spikes, enhancing the company's profitability.
- LNG Project Restart Potential: Although the Lake Charles LNG project was suspended last year, the closure of the Strait of Hormuz, disrupting 20% of global LNG supplies, may prompt Energy Transfer to find a new partner to restart the project, adding long-term value to its gas pipeline business.
- Increased Pipeline Volumes: With U.S. energy exports surging due to geopolitical tensions, Energy Transfer expects significant increases in volumes across its liquids pipelines and marine export terminals, which will drive higher fee-based income and further boost unit prices.
- Valuation Upside Anticipation: Despite a more than 20% rise in unit price this year, Energy Transfer still trades at a discount compared to large-scale energy midstream companies, suggesting that the market may soon recognize its strong financial position and growth prospects, potentially driving unit prices towards the $25 target.
See More
Persian Gulf Oil Output Plummets 57% Amid War
- Significant Output Decline: Goldman Sachs estimates that oil production from the Persian Gulf has dropped by 57% from pre-war levels, equating to a reduction of approximately 14.5 million barrels per day, which has severely impacted the global oil market and forced countries to rely on reserves to cover the shortfall.
- Emergency Stock Release: The International Energy Agency (IEA) has released a record 400 million barrels of oil, including 172 million barrels from the U.S. Strategic Petroleum Reserve (SPR), aimed at alleviating supply crises caused by the closure of the Strait of Hormuz, highlighting the urgent need for stable supply in global markets.
- Infrastructure Support: Oil pipeline companies such as Enterprise Products Partners and Enbridge are facilitating the transport of crude oil from the SPR to global markets, with their critical oil infrastructure ensuring efficient flow from storage to market, which is expected to enhance their cash flow and dividend yields.
- Optimistic Market Outlook: Due to supply issues in the Persian Gulf, these energy companies are projected to see increased volumes, boosting their cash flow and further supporting their high-yielding and steadily rising dividends, reflecting the growing importance of infrastructure in an uncertain market environment.
See More
Impact of Iran War on Global Oil Market
- Production Decline: Goldman Sachs estimates that oil production from the Persian Gulf has fallen by 57% from pre-war levels, approximately 14.5 million barrels per day, forcing the global market to draw from reserves to cover the supply shortfall.
- U.S. Strategic Reserve Release: The U.S. Department of Energy plans to release 172 million barrels from the Strategic Petroleum Reserve as part of a record release by the IEA, further mitigating the impact of the Strait of Hormuz closure.
- Infrastructure Support: The Seaway Pipeline Company, co-owned by Enterprise Products Partners and Enbridge, plays a crucial role in transporting oil from the SPR to U.S. refineries and global markets, ensuring smooth oil flow.
- Cash Flow Growth Expectations: As these energy companies play a vital role in supporting the SPR release, their volumes are expected to increase significantly, boosting cash flow and providing additional support for their high-yielding and steadily rising dividends.
See More
Iran War Fuels Growth for North American Oil Companies
- Rising Oil Prices: The Iranian attacks on oil infrastructure have effectively closed the Strait of Hormuz, leading to a sharp increase in oil prices, which is expected to drive revenue growth for North American oil companies.
- Enbridge Expansion Plans: Enbridge is set to invest CAD 28.4 billion in pipeline and terminal expansions, which is projected to increase its cash flow per share by 3% this year, allowing for continued growth in its 5.4% dividend and enhancing its market competitiveness.
- Enterprise Products Partners Investments: Enterprise Products Partners has invested billions in new pipeline systems and marine terminals, with $4.8 billion in major growth projects currently under construction, expected to support a 5.9% distribution growth, maintaining a 27-year streak of payout increases.
- Plains All American Pipeline Strategic Adjustments: Plains has optimized its pipeline portfolio through acquisitions of EPIC Crude Oil Pipelines and BridgeTex Pipeline, which is expected to drive stable cash flow growth in the future and support its 7.7% high dividend, boosting investor confidence.
See More
