Is Plains GP Holdings (PAGP) Pricing Reflect Long Term Energy Infrastructure Demand?
Simply Wall St
Fri, January 9, 2026 at 4:11 PM EST
5 min read
In this article:
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If you are wondering whether Plains GP Holdings shares still offer value at around US$19.61, you are not alone. This article is built to help you frame that question clearly.
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The stock has recent returns of 2.5% over 7 days, 5.7% over 30 days, 1.0% year to date, 6.5% over 1 year, 90.3% over 3 years and 161.5% over 5 years. These figures naturally raise questions about how much further upside or risk might be priced in.
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Recent coverage around Plains GP Holdings has centered on its position in the U.S. energy infrastructure space and how investors are thinking about long term demand for transport and storage capacity. This context is important because sentiment around the sector often influences how the market treats stocks like Plains GP, regardless of individual fundamentals.
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On our checks, Plains GP Holdings has a valuation score of 2 out of 6. This sets up a closer look at traditional valuation tools like discounted cash flow, multiples and peer comparisons, and also points to a broader way of thinking about value that we will come back to at the end of the article.
Plains GP Holdings scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: Plains GP Holdings Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a business could be worth by projecting its future cash flows and then discounting those back to today’s dollars.
For Plains GP Holdings, the model used is a 2 Stage Free Cash Flow to Equity approach, based on last twelve months free cash flow of about $2.26b. Analysts provide explicit free cash flow estimates out to 2029, and Simply Wall St then extrapolates further. For example, free cash flow for 2030 is projected at $1.85b, with discounted values supplied for each year from 2026 to 2035.
Rolling all of those projections together, the DCF output suggests an estimated intrinsic value of about $115.04 per share. Against the current share price of roughly $19.61, this implies the stock screens as about 83.0% undervalued on this model.
DCF models are sensitive to assumptions, but on these inputs Plains GP Holdings screens as materially cheaper than its cash flow projection would suggest.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Plains GP Holdings is undervalued by 83.0%. Track this in your watchlist or portfolio, or discover 879 more undervalued stocks based on cash flows.
Story Continues
Approach 2: Plains GP Holdings Price vs Earnings
For profitable companies, the P/E ratio is a useful way to think about what you are paying for each dollar of earnings, because it links the share price directly to the business’s current profit stream.
In general, investors tend to accept a higher P/E when they expect stronger earnings growth and lower risk, and a lower P/E when they see weaker growth or higher uncertainty, so there is no single "right" number that fits every stock.
Plains GP Holdings currently trades on a P/E of 62.59x, compared with an Oil and Gas industry average of 13.23x and a peer group average of 30.03x, so the shares are on a higher multiple than both reference points.
Simply Wall St’s Fair Ratio is a proprietary estimate of what P/E might be reasonable for Plains GP Holdings, given factors such as its earnings profile, industry, profit margins, market value and company specific risks.
Because the Fair Ratio of 22.69x is tailored to Plains GP Holdings rather than a broad sector or peer snapshot, it aims to be more useful than a simple comparison against industry or peer averages.
Set against this Fair Ratio, the current P/E of 62.59x suggests the shares are trading on a richer multiple than the model implies.
Result: OVERVALUED
P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1444 companies where insiders are betting big on explosive growth.
Upgrade Your Decision Making: Choose your Plains GP Holdings Narrative
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. These are simply your story about Plains GP Holdings, tied to your own assumptions for future revenue, earnings, margins and a fair value, then compared against today’s price inside Simply Wall St’s Community page, where millions of investors share perspectives that update automatically when new earnings or news arrive. For example, one Plains GP Holdings Narrative might lean closer to the higher analyst fair value views around US$26 because it expects the company to reach earnings of US$417.5m by about September 2028 and justify a P/E near 16.1x. Another might anchor nearer the lower analyst fair value views around US$17.5 if it places more weight on risks such as crude oil demand, contract resets or capital needs. By setting up and tracking the Narrative that fits your view, you can see at a glance whether your fair value sits above or below the current price and what that means for your next decision.
Do you think there's more to the story for Plains GP Holdings? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include PAGP.
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