Is Plains All American Pipeline LP overvalued or undervalued?

As of 4 May 2021, the valuation grade for Plains All American Pipeline LP moved from risky to very attractive, indicating a significant improvement in its investment appeal. The company is currently undervalued, with a P/E ratio of 9, which is notably lower than its peers, such as Western Midstream Partners LP at 10.91 and Antero Midstream Corp. at 20.20. Additionally, the EV to EBITDA ratio stands at 7.79, further supporting the undervaluation thesis.
The company's ROE is 13.94%, and its ROCE is 8.95%, which are compelling figures that suggest efficient use of capital relative to its peers. The EV to Sales ratio of 0.41 also highlights the potential for growth compared to the industry average. While Plains All American Pipeline LP has shown a strong return over the past three years at 90.30%, it has underperformed against the S&P 500 over the last year, which returned 10.26%. This context reinforces the view that the stock is currently undervalued.