Plains All American Pipeline (PAA) has been drawing attention after a recent stretch of mixed returns, with the stock down over the past month but up over the past 3 months and year to date.

At the current share price of $22.44, PAA’s recent 30 day share price return is down 2.01%, but its year to date share price return of 23.23% and very large 5 year total shareholder return of 199.29% suggest momentum has been building over time as investors reassess both growth potential and risk.

If PAA’s move has you thinking about other energy infrastructure ideas, it could be worth scanning 34 power grid technology and infrastructure stocks

With PAA trading at $22.44 and sitting close to analyst targets while also showing a very large 5 year total return, the key question is whether the current price still leaves upside on the table or if the market is already pricing in future growth.

Most Popular Narrative: 4.5% Undervalued

With Plains All American Pipeline trading at $22.44 against a most-followed fair value view of $23.50, the current setup reflects only a modest valuation gap while hinging on specific business shifts and capital plans.

The divestiture of the Canadian NGL business and redeployment of approximately $3 billion in proceeds will allow Plains to focus on higher-growth and higher-return U.S. crude oil assets, supporting stable throughput and cash flow, which can drive revenue and long-term earnings growth. Strong strategic positioning in the Permian Basin and the ability to acquire further interests in key pipelines (such as BridgeTex), paired with ongoing population and economic growth in North America, provide a resilient volume foundation and upward revenue trajectory.

Curious what revenue path, margin profile, and future earnings multiple sit behind that fair value line? The narrative leans on specific growth, profitability, and pricing assumptions that may surprise you.

Result: Fair Value of $23.50 (UNDERVALUED)

However, this hinges on Plains successfully redeploying roughly US$3.3b from the Canadian NGL sale and managing higher capital spending without squeezing free cash flow or distributions.

Another View: Using Earnings Multiples

While the analyst fair value narrative suggests a modest undervaluation at $23.50, PAA’s current P/E of 20.2x sits above the US Oil and Gas industry average of 13.8x and exactly in line with peers at 20.2x, yet still below a fair ratio of 25x. That mix points to a stock that screens as relatively expensive against its sector but cheaper than what the fair ratio implies. The key question is which yardstick should carry more weight in your own work.

For a closer look at how this pricing gap lines up with fundamentals, have a look at the See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Seeing both risks and rewards in the story so far, it makes sense to pressure test the numbers yourself and decide where you stand. If you want a clear snapshot of what investors are worried about and what they are excited by right now, take a closer look at the 3 key rewards and 2 important warning signs.

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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.