PAGP - Plains All American raised at Credit Suisse on strong free cash flow yield

Plains All American Pipeline (NASDAQ:PAA) is upgraded to Outperform from Market Perform with a $14 price target, ticked up from $13, at Credit Suisse, which says Plains now boasts one of the most compelling valuations on several metrics. Analyst Spiro Dounis expects to see accelerated capital returns in 2023 as Plains (PAA) reaches its leverage targets, forecasting an average annual free cash flow yield of nearly 20% over the next three years, well above the ~11% group average, driven by organic Permian volume growth and minimal capex. At the current rate of Permian growth, Dounis believes the basin is "approaching efficient operable pipeline capacity by 2025, the timeframe in which Plains' contracts begin to turn over." "Crude spreads already point to a tightening environment ahead of reaching capacity, which provides Plains an ability to fill latent capacity and potentially blend contracts into longer terms, according to Dounis. Plains All American's

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Plains All American raised at Credit Suisse on strong free cash flow yield