Plains All American Pipeline LP (PAA) maintained its strong performance from the first quarter, with its revenues increasing across the board. Going forward, the partnership expects the strong performance to continue into the second half of 2011, and therefore raised its EBITDA forecast for 2011. This bullishness has also prompted analysts to raise their estimates for this year.
The 2011 Zacks Consensus Estimate has risen to $4.22 from $3.85 in the last 30 days. We believe the partnership’s low-risk and stable revenue stream will continue to give its earnings and cash flows a high degree of certainty.
Also, the partnership’s strong balance sheet provides ample flexibility for higher distributions to unitholders along with pursuing its internal and acquisition-oriented growth projects. We move to an Outperform recommendation for PAA.
Zacks Investment Research
