Plains GP Holdings Doing Its Best to Survive
We are decreasing our fair value estimate, and caution investors to be prepared for further volatility.
Plains is doing its best to survive through the energy downturn. The capital expenditure budget is funded for all of 2016 and some of 2017, thanks to management's perpetual preferred issuance issued earlier in the year. Committed liquidity currently stands at $3.8 billion. Also, management expects to raise $500-$600 million this year from noncore divestitures.
Still, after incorporating the financial and operating results from the period we are decreasing our fair value estimate for Plains GP Holdings to $8 per share, and caution investors to be prepared for further volatility in Plains GP Holdings share price or possible declines if market conditions worsen at Plains All American or Plains GP Holdings.
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