Will Plains All American Pipeline Gain Upward Momentum?
PAA down 17% year-to-date
Plains All American Pipeline (PAA) is down 17% year-to-date. The stock gained 1.8% last week on crude oil gains. Moreover, PAA crossed above its 50-day moving average on July 12, 2017. Plains All American is trading 2% above its 50-day moving average. The stock is, however, trading 11% below its 200-day moving average.
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Mizuho upgrades PAA
On July 10, 2017, Mizuho raised Plains All American Pipeline’s rating to “buy” from “neutral.” Nearly 50% of analysts surveyed by Reuters have rated Plains All American Pipeline as “buy” and the remaining 50% have rated it as a “hold.”The consensus price target of $32 for PAA implies a 20% upside from its current price of $26.7.
Asset acquisition by VLO
Valero Energy (VLO) plans to acquire two petroleum storage and distribution terminals in California from Plains All American Pipeline. The California Attorney General has filed a motion to stop this proposed transaction. According to a July 12, 2017, press release, Plains All American Pipeline, along with Valero Energy, intends to challenge the Attorney General’s motion. According to PAA, the FTC (Federal Trade Commission) “recently ended an extensive investigation of the same transaction, ultimately concluding that the transaction merited no regulatory action.”
For a deeper analysis on PAA, read What Makes Plains All American Pipeline So Interesting?
There were quite a few rating changes for MLPs last week. Let’s take a look at the key changes in the next part of this series.