Plains All American stock holds Buy rating as Stifel backs NGL sale

Plains All American Pipeline (NASDAQ:PAA), a $12.48 billion market cap energy infrastructure company currently trading at $17.74, will sell most of its NGL business to Keyera Corp . (TSX:KEY) for approximately $3.75 billion USD, according to a company announcement. Stifel maintained its Buy rating and $23.00 price target on PAA following the news.

The transaction, expected to close in the first quarter of 2026, involves Plains divesting its Canadian NGL business while retaining its U.S. NGL assets and Canadian crude operations. The deal is valued at approximately $5.15 billion CAD.

Stifel views the transaction favorably, noting it simplifies operations and positions Plains as a more focused oil transporter. The firm believes the move reduces commodity exposure and improves cash flow conversion for the company.

The proceeds could allow Plains to optimize its capital structure, potentially through preferred repurchases, unit buybacks, and accretive acquisitions. Stifel suggests the improved financial position may enable Plains to consider larger transactions than previously possible.

Plains GP Holdings (NASDAQ:PAGP), the general partner of Plains All American, is also part of the agreement with Keyera. The transaction represents a significant restructuring of Plains’ business portfolio in the North American energy sector.

In other recent news, Plains All American reported a strong first quarter for 2025, achieving an adjusted EBITDA of $754 million despite facing challenges from winter weather and unexpected refinery downtimes. The company projects a full-year adjusted free cash flow of approximately $1.1 billion, maintaining its capital investment guidance at $400 million for the year. Plains All American has confirmed its EBITDA guidance for 2025, ranging from $2.8 to $2.95 billion, although it anticipates results may fall below the midpoint if crude oil prices remain between $60 and $65 per barrel. Goldman Sachs recently adjusted its price target for Plains All American to $18 from $19, maintaining a Sell rating due to concerns about ongoing exposure to commodity price fluctuations and potential downside risks to EBITDA projections.

The company is actively engaged in mergers and acquisitions, having completed a cash-free acquisition of a 50% stake in the Cheyenne Rockies crude pipeline and a $55 million acquisition of Permian crude gathering assets. These acquisitions are expected to enhance Plains All American’s network and support its strategic focus on bolt-on acquisitions. Additionally, the company completed a 30,000 barrel/day fractionation project, further expanding its infrastructure and reinforcing its competitive position in the energy market. Despite market volatility influenced by trade tariffs and OPEC dissension, Plains All American remains committed to its growth strategy, focusing on fee-based earnings and strategic acquisitions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.