BMO maintains Market Perform on Enbridge, sees growth potential

On Wednesday, BMO Capital Markets maintained its Market Perform rating on Enbridge Inc. (NYSE:ENB:CN) (NYSE: ENB), a $90.8 billion market cap energy infrastructure giant, with a steady price target of Cdn$60.00. The affirmation came after Enbridge’s Investor Day event, which took place in New York on Tuesday, March 4, 2025. The event highlighted the company’s solid business model and its growth prospects through the end of the decade. According to InvestingPro data, the stock has demonstrated low volatility in its trading pattern, making it an interesting option for stability-focused investors.

During the Investor Day, Enbridge showcased its robust business strategy, which is underpinned by a 98% cost-of-service or contracted revenue model. This structure is designed to provide stability in uncertain market conditions, including fluctuating tariffs. The company’s commitment to shareholder returns is evidenced by its impressive 22-year streak of consecutive dividend increases, currently offering a 6.38% yield. BMO Capital’s analyst Ben Pham noted the company’s visible growth trajectory, with approximately Cdn$29 billion in secured projects and another Cdn$50 billion under evaluation.

Pham emphasized the company’s growth strategy, which appears to be both robust and highly executable, as it does not rely on large greenfield projects. The diverse nature of the projects offers Enbridge the flexibility to resequence them if necessary, which further enhances the company’s ability to adapt to changing market conditions.

While the Market Perform rating and Cdn$60.00 price target remain unchanged, BMO Capital suggests there is an upside bias. This optimism is particularly tied to potential new growth announcements, especially in the U.S. gas transmission sector.

Enbridge’s Investor Day event was seen as a success in reinforcing confidence in the company’s future growth. BMO Capital’s analysis reflects a cautious but positive outlook, acknowledging the potential for Enbridge to outperform expectations based on forthcoming project developments.

In other recent news, Enbridge Inc. reported its fourth-quarter and full-year 2024 earnings, highlighting a record financial performance. The company achieved an adjusted earnings per share (EPS) of $0.75, surpassing the forecast of $0.74, and recorded a significant increase in EBITDA, reaching over $5.1 billion. Enbridge also expanded its natural gas distribution and completed strategic acquisitions in the U.S., reinforcing its position in the North American energy market. RBC Capital Markets and Raymond (NSE:RYMD) James both raised their price targets for Enbridge to C$67.00, maintaining an Outperform rating on the stock. RBC’s analyst Robert Kwan and Raymond James’ analyst Justin Jenkins both expressed confidence in Enbridge’s growth potential, citing its diverse asset base and disciplined capital management. Enbridge’s CEO, Greg Ebel, addressed concerns about Canadian oil tariffs, stating that any impacts on U.S. imports would not be immediate. The company’s energy systems are closely linked with the U.S., making it challenging to shift away from Canadian oil quickly. These developments reflect Enbridge’s strategic positioning and ongoing efforts to leverage growing energy demand in North America.

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