RE:RE:Enbridge takes early steps toward net-zero emissions
Bmeister2....
While I believe that ENB has made some good moves over recent years and more specifically with its purchase of natural gas pipelines and natural gas utilities in the US, there some issues which have the potential to increase risk and this can be relfected in the SP.
Soooo...What am I talking about?
The latest acquistion still requires regulatory approval int he US. While IMO I don't see any compelling reason why approval will not be given, it still is, to quote the great sage Yogi Berra, "It ain't over till it's over". As well ENB is assuming quite a bit of debt that is short term in nature and currently at a relatively high interest rate. Seems to me that ENB mangement is counting on a decline in interest rates later this year prior to the close of the deal. Again, IMO that assumption is a good one BUT since this is an election year, The Fed is unlikely to lower interest rates after say July/August. Right now the the market is pricing in a cut for March but there is growing speculation based on the recent economic numbers coming out of the US that The Fed might wait longer before cutting rates or not cut as often and as deeply
So when you put all this together, it could account for the SP of ENB being lower than one would think it should be. The other side of the coin is that it provides an opportunity for investors with a longer term horizon to take advantage of the situation and buy shares more cheaply.