Plains All American Pipeline (PAA) Stock Rising Amid Higher Oil Prices

Plains All American Pipeline (PAA) stock is gaining due to the rally in oil prices today.
By Amanda Schiavo ,

NEW YORK (TheStreet) -- Shares of Plains All American Pipeline (PAA) - Get Report are gaining by 4.36% to $32.81 on Tuesday afternoon, as the rally in oil prices drives some energy and related stocks higher today.

Oil is getting a boost from a rise in U.S. gasoline and diesel as well as an industry strike in Brazil and force majeure for Libyan crude loadings, Reuters reports.

Plains All American is a Houston-based owner and operator of midstream energy infrastructure and provides logistics services for crude oil, natural gas liquids, natural gas and refined products.

Crude Oil (WTI) is rallying by 3.62% to $47.81 per barrel this afternoon and Brent crude is increasing by 3.46% to $50.48 per barrel, according to the CNBC.com index.

Additionally, Plains All American is scheduled to release its 2015 third quarter earnings results after the market close on Wednesday afternoon.

Analysts surveyed by Thomson Reuters have forecast for earnings of 24 cents per share on revenue of $7.12 billion for the most recent quarter. The company's earnings came in at 53 cents per share on revenue of $11.13 billion for the 2014 third quarter.

Separtely, TheStreet Ratings team rates PLAINS ALL AMER PIPELNE -LP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate PLAINS ALL AMER PIPELNE -LP (PAA) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its reasonable valuation levels, considering its current price compared to earnings, book value and other measures. At the same time, however, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and generally higher debt management risk.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • PAA, with its decline in revenue, slightly underperformed the industry average of 33.1%. Since the same quarter one year prior, revenues fell by 40.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for PLAINS ALL AMER PIPELNE -LP is currently extremely low, coming in at 5.97%. Regardless of PAA's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 1.86% trails the industry average.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 43.23%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 113.33% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, PAA is still more expensive than most of the other companies in its industry.
  • PLAINS ALL AMER PIPELNE -LP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, PLAINS ALL AMER PIPELNE -LP reported lower earnings of $2.37 versus $2.80 in the prior year. For the next year, the market is expecting a contraction of 25.7% in earnings ($1.76 versus $2.37).
  • You can view the full analysis from the report here: PAA
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