PAA
Plains All American Pipeline, L.P.
$25.89
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 4.0% above fair value
You pay
$25.89
Bear
$19.92
Fair
$24.90
Bull
$29.88
Bear
$19.92
-23.1%
$1.66 × 12x P/E
Fair
$24.90
-3.8%
$1.66 × 15x P/E
Bull
$29.88
+15.4%
$1.66 × 18x P/E
Adjust Assumptions
15.0x
1.66$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
15.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (42 analysts)
$26.60
Divergence from AlphaVal
6%
Summary
Applying a 15x P/E to adjusted EPS of $1.66, the base-case value is $24.90 per share.
Warnings
The company pays out 101% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples