PAA - Plains All American Pipeline cut at Bernstein on lower Permian oil growth

Plains All American Pipeline ( NASDAQ: PAA ) ticks lower in Tuesday's trading as Bernstein downgraded shares to Market Perform from Outperform with a $14.50 price target, trimmed from $15, foreseeing "a difficult backdrop ahead with less Permian oil growth expected in both the near and long term."

In the very near term, Bernstein's Jean Ann Salisbury believes the 500K bbl/day growth driving consensus and likely Plains' ( PAA ) coming 2023 guidance is on the high end of what the Permian can actually deliver this year, given gas and processing constraints, service constraints and cost inflation, adding that even though utilization to Corpus is high, it may be temporary.

The Houston Ship Channel expansion or Enterprise Products Partners' SPOT would draw barrels back towards Houston in 2025, as would any strategic petroleum reserve refill, suggesting Corpus utilization could fall, Salisbury said.

Plains All American ( PAA ) has said it plans to prioritize increased distributions, which could reach $2/share annually in a few years, Patient Tech Investor writes in an analysis published on Seeking Alpha .

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