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Plains GP Holdings LP Class A - Stock Quote PAGP

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Morningstar's Plains GP Holdings LP Class A Stock Analysis

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Is it the right time to buy or sell?

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Economic Moat


Capital Allocation


We're Downgrading Plains' Moat to None From Narrow Due to Permian Takeaway Pipe Oversupply

Stephen Ellis Sector Strategist

Analyst Note

| Stephen Ellis |

We have downgraded Plains' moat to none from narrow. Midcycle ROICs have continued to decline over the past few years and even allowing for a level of recovery from COVID-19-related demand destruction, ROICs are well below our cost of capital currently and going forward. The biggest problem is that Permian takeaway pipeline capacity is closer to 8.5 million barrels per day compared with about 6 million barrels per day of current production. The overbuild is because several new pipes entered service in 2019 and 2020 just as COVID-19 destroyed demand. Now, with public oil and gas firms committed to shareholder returns, not growth at all costs, the oversupply issues become more of a long-term problem. After updating our model, our fair value estimate remains $13 for the Plains' entities.

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Plains GP Holdings LP Class A's Company Profile

Business Description

Plains All American provides transportation, storage, processing, fractionation, and marketing services for crude oil, refined products, natural gas liquids, liquefied petroleum gas, and related products. Plains' assets span the United States and Alberta, Canada, but are heavily concentrated in the Permian Basin.

333 Clay Street, Suite 1600
Houston, TX, 77002
T +1 713 646-4100
Sector Energy
Industry Oil & Gas Midstream
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type Hard Assets
Employees 4,100

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