Plains All American Pipeline LP (PAA)

[eFinanceMarkets]

$PAA Analysts bullish as Plains All American cuts distributions, debt

Plains All American Pipeline (PAA +1.4%) is higher after analysts issue mostly positive reviews of the company's late Friday move to cut its annual distribution to investors to $1.20/unit from $2.20; general partner Plains GP Holdings (PAGP +0.7%) also is slightly higher.

The cut will send PAA's yield to 6% from 10% but it apparently was priced in, and analysts think the distribution can grow in 2019 if the company executes on its debt reduction plans.

Raymond James upgrades PAA to Strong Buy from Buy with a $24 price target, seeing "the newly reduced distribution and faster deleveraging as providing a strong base for both the company to operate from and from which investor expectations can set a reasonable floor."

BMO Capital hikes its rating to Outperform with a $25 target, "dependent on management execution of its fee-based strategy with no need for meaningful Supply & Logistics rebound."