Plains 1Q in Review; Model Update

Research evidence excerpt

Plains 1Q in Review; Model Update

Jeremy Tonet, CFA AC North America Equity Research

(1-212) 622-4915 12 May 2026 J P M O R G A N

jeremy.b.tonet@jpmorgan.com

Investment Thesis, Valuation and Risks

Plains All American Pipeline, L.P. (Neutral; Price Target: $24.00)

Investment Thesis

As the owner of a leading independent crude oil midstream footprint in the U.S., PAA’s

extensive asset base possesses notable Permian leverage, in our view. However, an overbuilt

Permian takeaway environment leads to tariff pressures, partially mitigated by PAA’s

supply aggregation capabilities (>2mm Permian acreage dedication). While not impervious

to pipeline competition, the advantages embedded in PAA’s dominant platform, which

Source: J.P. Morgan Estimates. provides integrated solutions with quality segregation, leading flow assurance, and end

markets’ optionality, should benefit PAA’s position. Altogether, given the muted growth

outlook versus peers versus a high-income offering, we see a balanced risk/reward

proposition.

Valuation

We base our Dec 2026 price target of $24/unit (vs prior $24/unit) on a discounted cash flow

methodology in which we forecast DCF/LP unit for 10 years and then calculate a terminal

value. The terminal growth rate and required rate of return are based on leverage/liquidity

risk, distribution coverage outlook, volumetric/recontracting risk, commodity/marketing

risk, take-or-pay contract profile, and other factors.

PAA Price Target Calculation

Source: J.P. Morgan estimates.

Risks to Rating and Price Target

Key risks include: 1) industry consolidation benefitting PAA; 2) Permian production

growth exceeding or missing expectations and the associated impact on Permian long-haul

contract rolls delivering better- or worse-than-expected results; 3) market volatility