• Wondering if Plains GP Holdings at around US$21.59 is offering solid value today, or if the easy money has already been made? This article walks through what the current price really implies.
• The stock has posted returns of 3.4% over the past week, 5.1% over the past month, 11.2% year to date and 8.6% over the last year, with a very large 3 year return and a 259.0% return over 5 years that may be catching more investor attention.
• Recent coverage has focused on Plains GP Holdings as an energy infrastructure name, with investors weighing its role in the broader US energy supply chain and how that position is reflected in the current share price. Commentary has also highlighted how the share price performance over multi year periods compares with other energy names, which helps frame whether current expectations look stretched or conservative.
• On our checks, Plains GP Holdings currently has a valuation score of 5 out of 6, suggesting the stock screens as undervalued on most of our measures. Next we will walk through these valuation approaches before finishing with a different way to think about what the market is pricing in.

Approach 1: Plains GP Holdings Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes the cash Plains GP Holdings is expected to generate in the future, then discounts those projected cash flows back into today’s dollars to estimate what the business could be worth now.

For Plains GP Holdings, the model used is a 2 Stage Free Cash Flow to Equity approach. The company’s last twelve months free cash flow is about $2.25b. Analysts provide explicit forecasts for the next few years and Simply Wall St extrapolates beyond that, with projected free cash flow reaching about $2.21b in 2035. These yearly estimates, such as $1.60b in 2026 and $1.89b in 2030, are each discounted back to today using a required return to reflect risk and the time value of money.

Adding all discounted cash flows together, the DCF implies an estimated intrinsic value of about $118.62 per share. Compared with the current share price of roughly $21.59, the model suggests the stock is about 81.8% undervalued on this basis.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Plains GP Holdings is undervalued by 81.8%. Track this in your watchlist or portfolio, or discover 55 more high quality undervalued stocks.

Approach 2: Plains GP Holdings Price vs Sales

For companies where revenue is a key reference point, the P/S ratio can be a useful way to think about what you are paying for each dollar of sales, especially when earnings can be affected by non cash items or short term swings.

In general, higher expected growth and lower perceived risk can justify a higher “normal” or “fair” P/S multiple, while slower expected growth or higher risk can point to a lower one. So looking at P/S in isolation is rarely enough.

Plains GP Holdings currently trades on a P/S ratio of 0.10x, compared with an Oil and Gas industry average of 1.68x and a peer group average of 6.16x. Simply Wall St’s Fair Ratio for the stock is 0.59x. This is the P/S multiple it estimates would be reasonable after accounting for factors such as earnings growth profile, industry, profit margins, market cap and specific risk characteristics.

This Fair Ratio framework can be more tailored than a simple comparison with peers or the broad industry because it adjusts for differences in growth, risk and profitability rather than assuming all companies deserve similar multiples.

On this basis, Plains GP Holdings P/S of 0.10x sits below the 0.59x Fair Ratio, which points to the shares screening as undervalued on this metric.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Plains GP Holdings Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. These are simply your story about Plains GP Holdings linked directly to your own forecast and fair value. On Simply Wall St’s Community page you can see different Narratives side by side. For example, there is an optimistic view that ties a US$26.00 fair value to assumptions of revenue rising to US$57.9b and earnings of US$339.9m by 2028 on a P/E of 23.8x. There is also a more cautious view that ties a US$16.50 to US$17.50 fair value range to revenue of about US$44.8b and earnings of US$225.6m on a lower future P/E. You can then compare each Fair Value with today’s market price to decide whether the stock looks expensive or cheap against the story you believe, with the platform automatically updating those Narratives as new news, earnings or analyst numbers are added.

For Plains GP Holdings however, we’ll make it really easy for you with previews of two leading Plains GP Holdings narratives:

Fair value in this bullish narrative: US$26.00

Implied discount to this fair value at the last close of US$21.59: about 16.9% undervalued, using ((26.00 minus 21.59) divided by 26.00)

Revenue growth assumption: 4.95% per year

• Views Plains GP Holdings as well positioned in the Permian and Eagle Ford, with integration, tariff flexibility and more fee based contracts supporting higher quality earnings and potential margin expansion.
• Sees regulatory barriers and stronger credit ratings as supportive of the existing network, with room for targeted acquisitions or capital returns, while also flagging risks from oil exposure, geographic concentration and higher capital needs.
• To line up with this view, you would need to be comfortable with revenue of about US$57.9b and earnings of US$339.9m by 2028 and a future P/E of 23.8x, using a 10.0% discount rate.

Fair value in this more cautious narrative: about US$20.85

Implied premium to this fair value at the last close of US$21.59: about 3.6% overvalued, using ((21.59 minus 20.85) divided by 20.85)

Revenue growth assumption: 0.83% per year

• Frames Plains GP Holdings as a more focused crude oil midstream business after NGL divestitures, with fee based contracts, Permian projects and balance sheet work supporting steadier cash flows.
• Highlights that this focus increases exposure to crude demand and regulatory trends, with potential pressure on margins, contract renewals and returns if growth or policy shifts do not play out as expected.
• To agree with this stance, you would be working with revenue of about US$49.0b and earnings of US$417.5m by 2028 and a future P/E of 16.1x on those earnings, discounted at 10.31%.

Both narratives use the same raw data set but tell different stories about risk, required P/E and fair value. Lining up your own expectations for volumes, margins and capital spending with either preview is a useful way to decide whether Plains GP Holdings looks closer to an opportunity or a name that already prices in a lot of good news at around US$21.59.

Do you think there's more to the story for Plains GP Holdings? Head over to our Community to see what others are saying!

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.