JP Morgan Downgrades Plains All American to Neutral with $20 PT.
ByAinvest
Thursday, Sep 18, 2025 10:21 am ET1min read
PAA--
The downgrade follows reports of increased levels of mercaptans, naturally-occurring sulfur compounds, in the crude oil being delivered to various origin points. Plains has stated that starting October 1, it will charge a half-dollar fee per barrel that fails to meet mercaptan specifications on some of its pipelines in the Gulf Coast region [1].
The quality issues could potentially force Gulf Coast refiners, particularly those in the Corpus Christi region, to seek alternative crude oil sources. Plains is still investigating the cause of the contamination, making it difficult to assess the impact on U.S. crude exports. Over 2 million barrels per day (bpd) of crude oil are exported from Corpus Christi [1].
Despite these challenges, Plains has been actively engaged in acquisitions and strategic initiatives to bolster its operations. In September 2025, Plains All American and Plains GP Holdings agreed to acquire a 55% stake in Epic Crude Holdings, LP from Diamondback Energy and Kinetik Holdings Inc. for $1.2 billion [2].
Investors should closely monitor the situation as it could affect the company's financial health and stock performance. Plains All American continues to face elevated risks, including large debt levels and one-off items impacting financial results [2].
JP Morgan Downgrades Plains All American to Neutral with $20 PT.
September 12, 2025 - JP Morgan has downgraded Plains All American Pipeline (PAA) to a Neutral rating with a target price of $20 per share. This move comes amidst recent quality issues affecting the company's crude oil pipelines in the Permian shale basin, which link to the Corpus Christi export hub in Texas [1].The downgrade follows reports of increased levels of mercaptans, naturally-occurring sulfur compounds, in the crude oil being delivered to various origin points. Plains has stated that starting October 1, it will charge a half-dollar fee per barrel that fails to meet mercaptan specifications on some of its pipelines in the Gulf Coast region [1].
The quality issues could potentially force Gulf Coast refiners, particularly those in the Corpus Christi region, to seek alternative crude oil sources. Plains is still investigating the cause of the contamination, making it difficult to assess the impact on U.S. crude exports. Over 2 million barrels per day (bpd) of crude oil are exported from Corpus Christi [1].
Despite these challenges, Plains has been actively engaged in acquisitions and strategic initiatives to bolster its operations. In September 2025, Plains All American and Plains GP Holdings agreed to acquire a 55% stake in Epic Crude Holdings, LP from Diamondback Energy and Kinetik Holdings Inc. for $1.2 billion [2].
Investors should closely monitor the situation as it could affect the company's financial health and stock performance. Plains All American continues to face elevated risks, including large debt levels and one-off items impacting financial results [2].
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