Plains GP Holdings (PAGP): Exploring Valuation After Recent 9% Share Price Drop

Plains GP Holdings (PAGP) has seen its share price shift over the past month, dipping about 9%, with the stock now trading around $17. Investors are keeping an eye on its recent performance to gauge future direction.

See our latest analysis for Plains GP Holdings.

While Plains GP Holdings has faced a 9% drop in share price over the past month, that follows a gradual cooling in momentum this year. However, the three- and five-year total shareholder returns of 76.5% and 267.5% tell a story of significant long-term value creation, even as near-term sentiment remains cautious.

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With shares now trading well below analyst price targets and mixed signals on fundamentals, investors are left to wonder whether Plains GP Holdings is attractively undervalued or if the market is already factoring in the company’s growth potential.

Most Popular Narrative: 18.9% Undervalued

The narrative’s estimated fair value of $20.96 is notably above Plains GP Holdings’ last close at $17. This positions the company as significantly discounted according to the consensus, inviting closer inspection into what might be driving the gap.

The planned divestiture of the NGL segment and redeployment of approximately $3 billion in proceeds into core crude oil operations and bolt-on acquisitions are expected to streamline operations, reduce commodity price exposure, and enhance financial flexibility. This is seen as supporting growth in core revenue and improved net margins through higher-return investments and potential buybacks.

Read the complete narrative.

Want to know the real engine behind this bullish perspective? This narrative’s fair value stems from aggressive portfolio moves and projected profit growth not often seen in midstream energy. Curious which future targets and margin assumptions are pulling the company’s value so far above its share price? Click through to see what is fueling these eye-catching numbers.

Result: Fair Value of $20.96 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the company’s sharper crude oil focus and sector headwinds could limit future gains if pipeline utilization or demand falls short of expectations.

Find out about the key risks to this Plains GP Holdings narrative.

Build Your Own Plains GP Holdings Narrative

If you want to take a different angle or dig into the numbers yourself, building your own narrative is quick and straightforward. Do it your way.

A great starting point for your Plains GP Holdings research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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