Canadian pipeline company Enbridge (TSE:ENB) (NYSE:ENB) was up fractionally in Wednesday afternoon’s trading after revealing a surprisingly bright outlook. It has a new set of priorities and is investing accordingly, which is all coming together to make things look pretty positive overall.
Previously, Enbridge offered an average annual growth rate of 7% to 9% in terms of adjusted earnings. Now, it’s sticking to that range but suggesting that such a growth rate will continue for some time to come. With C$19 billion in U.S. gas utility acquisitions set to come this year, that’s going to make Enbridge the largest natural gas franchise in North America and, in turn, provide the necessary cash to fuel growth figures from there.
Enbridge is poised to expand the Gray Oak Pipeline, augmenting oil flow by an extra 120,000 barrels per day from the Permian super-system. It’s also in line to shore up pipeline and storage assets by a combined total of $500 million.
Tackling Pre-Existing Concerns
Meanwhile, with the controversy over Line 5 (the line that runs through Lake Superior) still alive and well, new reports suggest that concerns here are simply overblown. The current plan, noted a report from the Detroit Free Press, is that the line will ultimately be buried well below the lakebed, creating what’s called the Great Lakes Tunnel.
A “serious ignition event” that might create trouble is reportedly vanishingly remote, the kind of thing seen once “…in every 169 million years.” Further, Enbridge recently landed approval for its Mainline pipeline system’s tolling deal that should help provide revenue and keep the flow going.
Is ENB Stock a Buy?
Turning to Wall Street, analysts have a Hold consensus rating on ENB stock based on four Buys, five Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 2.69% loss in its share price over the past year, the average ENB price target of C$49.73 per share implies 4.58% upside potential.
