Plains Earnings: Mixed Results With Strong Finish to 2023 but Weaker 2024 Guidance

Plains’ fourth-quarter results were a bit better than we expected, with full-year EBITDA at $2.71 billion compared with our $2.63 billion forecast. We attribute the strength to higher-than-expected Permian volume growth, supported by some recent acquisitions as well as better marketing opportunities available on the natural gas liquids side of the business. However, 2024 EBITDA guidance was a bit below our expectation of $2.8 billion, with a midpoint guide of $2.675 billion. The weaker guidance is largely due to fewer opportunities to capture marketing spreads on both the oil and natural gas liquids businesses. We anticipate lowering our 2024 forecast to about $2.7 billion, reflecting recent history as Plains management has been conservative on marketing contributions. As a result, we expect to maintain our $16 fair value estimate and no-moat ratings for the Plains entities.