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Plains All American Pipeline, L.P. (PAA) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Plains All American Pipeline (PAA - Free Report) ? Shares have been on the move with the stock up 12.2% over the past month. The stock hit a new 52-week high of $19.04 in the previous session. Plains All American Pipeline has gained 24.3% since the start of the year compared to the 7.5% move for the Zacks Oils-Energy sector and the 15.9% return for the Zacks Oil and Gas - Production Pipeline - MLB industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 3, 2024, Plains All American reported EPS of $0.41 versus consensus estimate of $0.39 while it missed the consensus revenue estimate by 8.83%.
For the current fiscal year, Plains All American is expected to post earnings of $1.32 per share on $50.85 billion in revenues. This represents a -7.04% change in EPS on a 4.39% change in revenues. For the next fiscal year, the company is expected to earn $1.51 per share on $52.96 billion in revenues. This represents a year-over-year change of 14.39% and 4.15%, respectively.
Valuation Metrics
Plains All American may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Plains All American has a Value Score of A. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 14.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 12.6X. On a trailing cash flow basis, the stock currently trades at 5.7X versus its peer group's average of 6.9X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Plains All American currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Plains All American meets the list of requirements. Thus, it seems as though Plains All American shares could have potential in the weeks and months to come.
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Plains All American Pipeline, L.P. (PAA) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Plains All American Pipeline (PAA - Free Report) ? Shares have been on the move with the stock up 12.2% over the past month. The stock hit a new 52-week high of $19.04 in the previous session. Plains All American Pipeline has gained 24.3% since the start of the year compared to the 7.5% move for the Zacks Oils-Energy sector and the 15.9% return for the Zacks Oil and Gas - Production Pipeline - MLB industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 3, 2024, Plains All American reported EPS of $0.41 versus consensus estimate of $0.39 while it missed the consensus revenue estimate by 8.83%.
For the current fiscal year, Plains All American is expected to post earnings of $1.32 per share on $50.85 billion in revenues. This represents a -7.04% change in EPS on a 4.39% change in revenues. For the next fiscal year, the company is expected to earn $1.51 per share on $52.96 billion in revenues. This represents a year-over-year change of 14.39% and 4.15%, respectively.
Valuation Metrics
Plains All American may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Plains All American has a Value Score of A. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 14.3X current fiscal year EPS estimates, which is a premium to the peer industry average of 12.6X. On a trailing cash flow basis, the stock currently trades at 5.7X versus its peer group's average of 6.9X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Plains All American currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Plains All American meets the list of requirements. Thus, it seems as though Plains All American shares could have potential in the weeks and months to come.