Why Plains GP Holdings (PAGP) Is Drawing Investor Interest

Plains GP Holdings (PAGP) is on investor radars after recent trading left the units at $23.75, with returns over the past month, past 3 months and year offering a mixed picture.

The recent 1-day share price return of 1.54% and 7-day return of 3.53% sit against a 30-day share price return of a 2.74% decline. Longer term, total shareholder returns of 38.29% over 1 year and 125.95% over 3 years point to momentum that has been building rather than fading.

If Plains GP’s move has you thinking about other opportunities in energy infrastructure, this could be a good moment to scan 33 power grid technology and infrastructure stocks

With Plains GP trading around $23.75, showing an intrinsic value gap yet sitting slightly above analyst targets, the key question is whether the current price still leaves room for upside or if the market already reflects future growth.

Most Popular Narrative: 5.2% Overvalued

The most followed narrative puts Plains GP Holdings' fair value at $22.57, slightly below the recent $23.75 close, which frames the current debate around upside, downside and timing.

Plains GP Holdings Future Earnings and Revenue Growth
AssumptionsHow have these above catalysts been quantified?
• Analysts are assuming Plains GP Holdings's revenue will grow by 4.2% annually over the next 3 years.
• Analysts assume that profit margins will increase from -0.3% today to 0.8% in 3 years time.
• Analysts expect earnings to reach $394.5 million (and earnings per share of $2.02) by about April 2029, up from -$123.0 million today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as $494.5 million.
• In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 14.6x on those 2029 earnings, up from -36.5x today. This future PE is lower than the current PE for the US Oil and Gas industry at 14.8x.
• Analysts expect the number of shares outstanding to grow by 0.08% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.83%, as per the Simply Wall St company report.

Want to see what really sits behind that fair value call? The narrative leans heavily on a sharp earnings swing, modest revenue build, and a future profit multiple that has to line up just right. The exact mix of those assumptions is where the story gets interesting.

Result: Fair Value of $22.57 (OVERVALUED)

However, it is worth keeping in mind that heavier crude exposure, along with potential contract repricing or regulatory shifts, could quickly challenge the fair value story investors are watching.

Another Take: Multiples Paint a Very Different Picture

While the popular narrative describes Plains GP as about 5.2% overvalued at a fair value of $22.57, its P/S ratio of 0.1x is far below peers at 6.3x and a fair ratio of 0.7x. That kind of gap can signal mispricing, so which story do you trust more?

Next Steps

Seeing mixed signals on value, growth and sentiment? Use this as a starting point and move quickly to review the full picture, including 4 key rewards and 1 important warning sign

Looking for more investment ideas?

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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.