Analyst update * Ahead of the release of its 2025 guidance on Dec. 3, Raymond James’ Justin Jenkins raised his Enbridge Inc. (ENB-T) to $63 from $59 with an “outperform” rating. The average is $59.91.
“or EBITDA, our model stands a touch ahead of consensus — $19.6 billion versus the average at $19.5 billion,” he said. “Our model is actually running just slightly ahead of the EBITDA CAGR [compound annual growth rate] (7-9 per cent from 2023), with help from a solid base in 2024. For guidance brackets, we’d expect ENB’s typical $0.6 billion window — and we wouldn’t be surprised if our estimate is on the top end of the range (e.g., $19.0-19.6 billion). Given tax/interest rate headwinds, DCF growth is lower than EBITDA - and we model just over 2-per-cent growth to $5.72/share in 2025 (from 2024′s midpoint/estimate of $5.60). We won’t be entirely surprised if the 2025 guidance range is similar to 2024 ($5.40-5.80), though would be reasonable to assume slight growth from this year in our view.”
“Broader midstream sentiment remains quite positive — though ENB has lagged certain peers with a higher degree of leverage (or ‘pure play’ status) to the natural gas demand growth themes of LNG/AI/Power Gen,” he said. “We think the totality ENB’s business drivers remain fairly positive, especially versus long-range guidance. That said, to push the stock’s valuation back to its typical solid premium to the peer group, ENB but may need a bit of a jump-start to the story either internally (strong guidance, asset sales potential?) or externally (rates falling). We expect Liquids to be topical on basin growth and peer efforts to carve out that particular business. The broader gas/renewables business should also have favorable drivers — given the demand growth characteristics of LNG/AI/Power Gen noted above. All told, we think the ENB story remains solid, especially for ‘safer haven’ type money.”