Scotiabank has nudged up its price target for Plains All American to $23.00 from $22.00 and retained a Sector Outperform rating on the stock. The upgraded target sits near a fair value assessment and comes as the company trades close to its 52-week high of $20.77.
Scotiabank characterized the latest quarterly report as "mixed," but maintained a positive stance on the midstream energy firm’s outlook. Central to the analyst update was Plains All American’s 2026 EBITDA guidance, which the company set at $2.75 billion at the midpoint - a level that effectively meets current consensus expectations. By comparison, the company’s last-twelve-months EBITDA stands at $2.33 billion, indicating a modest step-up implied by the 2026 guidance.
The company outlined expected synergies and cost reductions totaling $150 million across a two-year window. That package was described as comprising $50 million in cost synergies complemented by $100 million in efficiency gains. Scotiabank noted these measures were generally in line with investor expectations and flagged their potential to help mitigate the company's relatively low gross profit margins, which are reported at 6.04%.
On the distribution front, Plains All American lowered its target coverage ratio to 150% and disclosed room for multi-year distribution growth of $0.15 per unit. Scotiabank emphasized that sustaining a 150% coverage ratio beyond 2026 would hinge on 2027 EBITDA being materially above the current consensus figure of $2.7 billion. The bank’s analysis indicates the implied EBITDA growth necessary to maintain that coverage ratio for an additional year points toward stronger operational performance than is presently baked into market consensus.
Investors were also focused on the company's fourth-quarter 2025 reported results. Plains All American posted earnings per share of $0.40, missing the analyst projection of $0.47. Revenue for the quarter came in at $10.57 billion, well below the expected $13.42 billion. Those shortfalls were highlighted as a material element of the quarter and a factor for market participants evaluating the company’s near-term trajectory.
While Scotiabank’s price-target increase and maintained Sector Outperform rating suggest a favorable medium-term view, the company’s missed earnings and revenue targets underscore ongoing execution and market-demand questions. Investors and analysts will likely track whether the outlined synergies and efficiency gains materialize as planned and whether 2027 EBITDA moves meaningfully above current consensus, which would be necessary to preserve the revised coverage posture without compressing distributions.
Key items for observers to monitor include the realization of the $150 million in synergies and efficiencies, progress toward the $2.75 billion 2026 EBITDA guidance, and any updates to distribution policy tied to coverage ratio targets. Each of these factors bears directly on cash flow and distribution sustainability for holders of the company’s units and on valuations used by rating analysts.