Citi sets Enbridge stock with a Buy rating, C$75 target

On Friday, Citi initiated coverage on Enbridge Inc. (NYSE:ENB:CN) (NYSE: ENB), a $98.8 billion market cap energy giant, with a positive outlook, issuing a Buy rating and setting a price target of Cdn$75.00. The new coverage highlights Enbridge’s diversified energy portfolio as a significant advantage for the company. According to InvestingPro analysis, the stock is currently trading near its 52-week high of $46.12, with a remarkable 35.75% return over the past year.

According to Citi analysts, Enbridge is uniquely positioned to benefit from the global energy demand through its comprehensive mix of liquids, gas, and renewable energy operations. The firm’s analysts emphasized that Enbridge has consistently exceeded global energy demand growth by 400 basis points, a trend they anticipate will persist. As a prominent player in the Oil, Gas & Consumable Fuels industry, Enbridge has maintained dividend payments for an impressive 53 consecutive years, with a current dividend yield of 5.85%.

The analysts pointed out that secular trends favoring natural gas and power are expected to support 80% of Enbridge’s capital project backlog and are projected to drive 90% of the company’s near-term growth. Enbridge’s liquids business was noted for its vital role in funding this growth, contributing over 70% of the company’s free cash flow (FCF), despite accounting for only 50% of its EBITDA. The company’s financial strength is evident in its LTM EBITDA of $10.57 billion and revenue growth of 22.51%.

Citi’s coverage also stresses the low-risk investment profile of Enbridge, noting that the company’s earnings and stock volatility rank among the lowest in the midstream sector. This attribute, combined with the company’s broad energy platform, suggests that Enbridge could provide investors with a higher return per unit of risk.

The Buy rating and the C$75.00 price target reflect Citi’s confidence in Enbridge’s ability to capitalize on the energy sector’s expansion and the company’s strategic positioning across various energy markets.

In other recent news, Enbridge Inc. has been active with several notable developments. The company, in collaboration with WhiteWater, MPLX LP (NYSE:MPLX), and Targa Resources (NYSE:TRGP) Corp., has confirmed a final investment decision to proceed with the Traverse Pipeline project. This pipeline, spanning 160 miles, is designed to transport up to 1.75 billion cubic feet of natural gas daily and is expected to be operational by 2027. Additionally, Enbridge has announced its 2025 Annual Meeting of Shareholders, providing essential details in a recent SEC filing.

In terms of leadership, Steven W. Williams is set to become the new Chair of the Board, succeeding Pamela L. Carter after the upcoming Annual Meeting. BMO Capital Markets has maintained its Market Perform rating on Enbridge, highlighting the company’s robust business strategy and growth potential. The firm noted Enbridge’s extensive project pipeline, which includes Cdn$29 billion in secured projects and another Cdn$50 billion under evaluation.

Furthermore, Enbridge CEO Greg Ebel has commented on the potential impact of Canadian oil tariffs on U.S. imports, stating that significant effects would only occur after several years. These recent developments underscore Enbridge’s ongoing efforts in expanding its infrastructure and adapting to market conditions.

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