Value
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.4 |
| P/S | 10.0 |
| EV/EBITDA | 3.7 |
| Fwd P/E | 9.1 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 11.3x
- ▸PEG: 0.14
- ▸Attractively valued
PAA · Why this verdict
Why Plains All American Pipeline, L (PAA) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Plains All American trades at a PEG ratio of 0.14 and forward price-to-earnings of 11.1x, placing it in the attractively valued tier for a midstream operator, while free cash flow quality of 6.8 out of 10 indicates reasonable cash generation. Valuation breakdown | The PEG ratio remains below 0.5 over the next 12 months as earnings hold at current levels or improve. | →Stable |
| CounterLow PEG ratios in midstream pipelines often reflect structural commodity-linked earnings risk; a sustained drop in crude throughput volumes would compress earnings and eliminate the apparent valuation discount. | ||
RSI at 28 combined with proximity to the Bollinger lower band and a volume surge on recent selling have created an oversold bounce setup, with Bollinger and support-resistance scores both above 9.0 out of 10. Technical breakdown | Price rises above $23.00 within 3 months as the oversold RSI mean-reverts toward 45 to 50. | →Stable |
| CounterRSI can remain depressed in fundamentally challenged businesses; falling on-balance volume alongside an oversold reading suggests sellers are in control and the bounce may not materialize. | ||
The two most recent quarters both missed earnings estimates, with a negative 7.4% and negative 11.7% surprise respectively, and the 4-quarter average surprise is negative 1.7%, indicating a pattern of earnings delivery below expectations. Earnings | The company beats or meets consensus estimates in at least 2 of the next 4 quarters, breaking the consecutive miss pattern. | →Stable |
| CounterMidstream businesses with long-term fee-based contracts can maintain distribution stability even while missing quarterly estimates, making the miss pattern less indicative of structural impairment than it appears. | ||
The quality score of 3.3 out of 10 falls below the minimum acceptable threshold of 4.0 for new investment, with no recognized competitive moat and low operating and net margin scores of 1.1 and 1.3 out of 10 respectively. Bear case | Quality score improves above 4.0 within 4 reporting periods as operating margins expand or free cash flow conversion improves. | →Stable |
| CounterMidstream companies are capital-intensive and typically earn thin operating margins on high throughput volumes; quality scores calibrated on broad sector norms may structurally understate midstream business durability. | ||
Plains All American trades at a PEG ratio of 0.14 and forward price-to-earnings of 11.1x, placing it in the attractively valued tier for a midstream operator, while free cash flow quality of 6.8 out of 10 indicates reasonable cash generation.
→StableValuation breakdown
- Expectation
- The PEG ratio remains below 0.5 over the next 12 months as earnings hold at current levels or improve.
CounterLow PEG ratios in midstream pipelines often reflect structural commodity-linked earnings risk; a sustained drop in crude throughput volumes would compress earnings and eliminate the apparent valuation discount.
RSI at 28 combined with proximity to the Bollinger lower band and a volume surge on recent selling have created an oversold bounce setup, with Bollinger and support-resistance scores both above 9.0 out of 10.
→StableTechnical breakdown
- Expectation
- Price rises above $23.00 within 3 months as the oversold RSI mean-reverts toward 45 to 50.
CounterRSI can remain depressed in fundamentally challenged businesses; falling on-balance volume alongside an oversold reading suggests sellers are in control and the bounce may not materialize.
The two most recent quarters both missed earnings estimates, with a negative 7.4% and negative 11.7% surprise respectively, and the 4-quarter average surprise is negative 1.7%, indicating a pattern of earnings delivery below expectations.
→StableEarnings
- Expectation
- The company beats or meets consensus estimates in at least 2 of the next 4 quarters, breaking the consecutive miss pattern.
CounterMidstream businesses with long-term fee-based contracts can maintain distribution stability even while missing quarterly estimates, making the miss pattern less indicative of structural impairment than it appears.
The quality score of 3.3 out of 10 falls below the minimum acceptable threshold of 4.0 for new investment, with no recognized competitive moat and low operating and net margin scores of 1.1 and 1.3 out of 10 respectively.
→StableBear case
- Expectation
- Quality score improves above 4.0 within 4 reporting periods as operating margins expand or free cash flow conversion improves.
CounterMidstream companies are capital-intensive and typically earn thin operating margins on high throughput volumes; quality scores calibrated on broad sector norms may structurally understate midstream business durability.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Plains All American Pipeline trades at an attractive PEG of 0.14 and shows a deeply oversold technical setup with RSI at 28 and near-Bollinger lower band, but below-average business quality, two consecutive earnings misses, and no competitive moat limit the investment case for new buyers.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.5 |
| ROA | 2.0 |
| Gross margin | 0.0 |
| Op margin | 1.1 |
| Net margin | 1.3 |
| Current ratio | 3.8 |
| FCF quality | 6.8 |
| Moat | 4.2 |
| Piotroski F | 6.7 |
- ▸No competitive moat
Growth
7.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.7 |
| EPS growth | 10.0 |
Momentum
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 7.2 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.3 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.4 |
| Price target | 5.7 |
| erm sentiment | 6.0 |
Insider
5.0/10data confidence 50%Peer rank
2.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.4 |
| quality rank | 2.1 |
| growth rank | 3.3 |
Technical
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.0 |
| support resistance | 2.7 |
| 52w position | 8.6 |
Risk (lower is worse)
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.8 |
| days to cover | 3.5 |
| volatility | 7.2 |
| put call | 7.1 |
| implied vol | 5.1 |
| beta | 10.0 |
| debt equity | 5.6 |
Catalyst
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 1.7 |
| dividend safety | 3.5 |
- ▸Earnings concerns: 2B/2M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- MOMENTUM:6.8>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:34d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.8=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.81
Upside
-5.6%
Downside
6.9%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 50, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 7.3 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-0.8=NEGATIVE.
The strongest dimensions are Value at 7.3, Growth at 7.3, and Momentum at 6.8; the weakest are Peer rank at 2.9, Quality at 3.3, and Catalyst at 4.0. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.81 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Value Low Peg
Trip ifForward price-to-earnings ratio rises above 18x due to earnings estimate cuts of more than 35%.
- P2Oversold Technical Bounce Setup
Trip ifPrice drops below $19.00 and RSI falls below 20.
- P3Consecutive Earnings Miss Pattern
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters.
- P4Below Floor Quality Score
Trip ifQuality score remains below 3.5 for 4 consecutive reporting periods.