Is Plains GP Holdings LP overvalued or undervalued?

As of 9 February 2022, Plains GP Holdings LP moved from risky to very attractive, indicating a significant improvement in its valuation outlook. The company is currently undervalued, with a P/E ratio of 11, an EV to EBITDA ratio of 8.51, and an EV to Sales ratio of 0.45, all of which suggest it is trading at a discount compared to its peers. For instance, Western Midstream Partners LP has a P/E of 11.04 and an EV to EBITDA of 9.43, while Plains All American Pipeline LP shows a P/E of 9.78 and an EV to EBITDA of 8.11, reinforcing the attractiveness of Plains GP Holdings LP's valuation metrics.
Despite its undervaluation, Plains GP Holdings LP has underperformed against the S&P 500 in the short term, with a 1-year return of -1.28% compared to the S&P 500's 17.14%. However, over a 5-year period, it has significantly outperformed the index with a return of 172.29% versus the S&P 500's 96.61%, suggesting potential for recovery and growth in the long term.