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Plains All American Trades 11% below Its 50-Day Moving Average


Jan. 19 2016, Updated 3:57 p.m. ET

Plains All American Pipeline trades below its 50-day moving average

Plains All American Pipeline (PAA) currently trades 11% below its 50-day moving average and 75% below its 200-day moving average. The stock was trading below its 50-day moving average since May 2015 when a massive oil spill along the Santa Barbara County coast sent its unit price tumbling. Plains All American has been on a downtrend since mid-2014 along with the fall in energy commodity prices and has fallen to one-third of its price of around $60 in September 2014.

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Plains All American Pipeline’s unit prices fell after second quarter results

Plains All American Pipeline’s unit prices fell significantly again after the MLP’s (master limited partnership) second quarter results announcement in August 2015. In the earnings announcement, the company reduced its targeted distribution growth for 2015 to 6% from the original target of 7%.

Additionally, the company talked about the possibility of a “much lower” or even zero distribution growth in 2016. Plains All American reiterated that 2016 is expected to be a challenging year for it in its 3Q15 earnings results. The company announced flat 4Q15 per unit distribution compared to 3Q15 on January 12, 2016. The stock has remained below its 50-day moving average since May 2015, first due to the spill and later due to its 2016 outlook.

Plains All American Pipeline sees year-to-date fall in 2016

Plains All American Pipeline has fallen 10% since the start of 2016. Other midstream energy companies such as ONEOK (OKE), Enbridge Energy Partners (EEP), and Energy Transfer Partners (ETP) have fallen 11%, 23%, and 27%, respectively, in the same period. The Alerian MLP ETF (AMLP), which holds top infrastructure MLPs, has fallen 19% since the start of 2016.

In this series, we’ll analyze PAA’s price targets, the performance of PAA’s various segments, its leverage, distributable cash flows, capital expenditure, and distribution growth. We’ll also analyze its valuation relative to its historical valuation and to its peers. Finally, we’ll analyze the key drivers of PAA’s stock price.

Let’s start with Plains All American Pipeline’s price targets and analyst recommendations.


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