Bank of America Merrill Lynch analysts, on Monday, raised the price target on Houston-based MLP Plains All American Pipeline, L.P. (PAA) after a strong fourth-quarter earnings report.
The analysts maintain a “Buy” rating on PAA with a price target of $58, up from the previous target of $55. This new valuation suggests an 8% upside to Monday’s closing price of $53.70.
A Bank of America analyst commented, “We raise our PO to $58 based on a 4.25% target yield on our annualized 1Q14E distribution of $2.46. PAA remains a top pick among large-cap MLPs given its exposure to solid crude oil fundamentals, strong balance sheet, and savvy management team. We also see the potential for our 2013 EBITDA estimate to prove conservative should current robust fundamentals persist longer than expected (we forecast 2% YoY 2013 EBITDA growth), including continued wide crude oil grade differentials.”
Plains All American Pipeline shares were up slightly during pre-market trading on Tuesday.
The Bottom Line
Shares of Plains All American Pipeline (PAA) have a dividend yield of 4.19% based on last night’s closing price of $53.70 and the company’s annualized dividend payout of $2.25 per share.
Plains All American Pipeline, L.P. (PAA) is recommended at this time, holding a Dividend.com DARS™ Rating of 3.5 out of 5 stars.
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