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Research Alert: Paa: Slight Miss In Q1, Strategic Repositioning Almost Complete

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-- CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

PAA posted Q1 adjusted earnings per unit of $0.39, missing consensus by $0.03, with adjusted EBITDA of $730M down 3% Y/Y. The Crude Oil segment generated adjusted EBITDA of $582M, up 4% Y/Y, driven by Permian volumes up 10.5%, while the NGL segment declined 23% to $145M due to lower frac spreads and reduced sales volumes. The mixed results highlight PAA's strategic repositioning toward crude oil focus through the pending Canadian NGL divestiture to Keyera. Management raised CY26 adjusted EBITDA guidance to approximately $2.88B, with the midpoint up $130M or 4.7%. We expect the Keyera deal, fetching ~$3.75B in cash and closing this month, will help address balance sheet concerns as pro forma leverage of 4.1x remains above PAA's target range of 3.25x-3.75x. The strategic repositioning should make PAA a more purely crude oil-focused midstream play while proceeds enable debt reduction from the current $11.6B net debt level.

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