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Plains All American Pipeline LP (NYSE:PAA)
Intrinsic Value: Projected FCF
$20.27 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, Plains All American Pipeline LP's projected FCF intrinsic value is $20.27. The stock price of Plains All American Pipeline LP is $20.46. Therefore, Plains All American Pipeline LP's Price to Intrinsic Value: Projected FCF Ratio of today is 1.0.

PAA' s Price to Intrinsic Value: Projected FCF Range Over the Past 10 Years
Min: 1.46   Max: 26.99
Current: 1.01

1.46
26.99

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of Plains All American Pipeline LP was 26.99. The lowest was 1.46. And the median was 2.10.

PAA's Price to Intrinsic Value: Projected FCF is ranked higher than
70% of the 71 Companies
in the Global Oil & Gas Midstream industry.

( Industry Median: 1.35 vs. PAA: 1.01 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here Plains All American Pipeline LP's FCF(6 year avg) is calculate as

Plains All American Pipeline LP Quarterly Data

201306201309201312201403201406201409201412201503201506201509
total_freecashflow -75-212-97310-405-210216195-691-30
201012201103201106201109201112201203201206201209201212201303
total_freecashflow -32753314662440554-279159-7603
200912201003201006201009
total_freecashflow -88287-21992

Add all the Free Cash Flow together and divide 6 will get Plains All American Pipeline LP's FCF(6 year avg) = $164.00.

Plains All American Pipeline LP's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Sep15)*0.8)/Shares Outstanding
=(9.52035159596*164+8158*0.8)/399.000
=20.27

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

Plains All American Pipeline LP's Price to Intrinsic Value: Projected FCF Ratio for today is calculated as

Price to Intrinsic Value: Projected FCF=Share Price/Intrinsic Value: Projected FCF
=20.46/20.2700192024
=1.01

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.


Related Terms

Intrinsic Value: DCF (Earnings Based), Intrinsic Value: DCF (FCF Based), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Plains All American Pipeline LP Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Projected FCF 6.154.388.9410.049.629.1820.8026.3628.2026.62

Plains All American Pipeline LP Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
Projected FCF 30.2125.6528.2027.3226.1728.4926.6224.9621.1320.27
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