Increasing Plains' Fair Value Estimate to $14 After Healthy Fourth Quarter and 2023 Guidance

It took some patience as lower-fee pipelines (Wink-to-Webster) needed to fill up first, but Plains is finally beginning to see the financial benefits from its Permian asset base. Strong fourth-quarter results contributed to better-than-expected 2022 performance. As a result, its 2022 result and 2023 guidance are a bit better than we expected at $2.51 billion and $2.5 billion initially and now match our revised forecast. We have increased our fair value estimate $1 to $14 per unit to reflect the improved cash flow outlook in 2023 and cash flows earned. Our no-moat rating remains unchanged. Plains remains a standout among our coverage with double-digit distribution increases planned over the next few years at 10% increases annually by our estimates. Peers are typically in the 3%-5% range.