Enterprise Products Partners stock rating downgraded by JPMorgan

Investing.com - JPMorgan downgraded Enterprise Products Partners (NYSE:EPD) from Overweight to Neutral on Monday, setting a price target of $35.00. This aligns with a broader trend, as InvestingPro data shows three analysts have recently revised their earnings downwards for the upcoming period, though the overall analyst consensus remains moderately bullish at 1.89 (on a scale where 1 is Strong Buy).

The downgrade reflects JPMorgan’s assessment of EPD’s relatively lower growth prospects, with the firm noting that no EBITDA growth is expected this year and projecting only a 3% compound annual growth rate for 2028/2024. This cautious outlook is supported by EPD’s recent performance, with revenue declining 6.42% over the last twelve months and forecasts suggesting an 8% revenue contraction for fiscal year 2025.

Despite acknowledging EPD’s "clean track record" and "peer-leading balance sheet strength," JPMorgan cited several challenges facing the partnership, including excess capacity across hydrocarbon logistics value chains, aggressive competition, and lingering issues with its PDH (propane dehydrogenation) operations. While EPD maintains a strong position as a prominent player in the Oil, Gas & Consumable Fuels industry, InvestingPro data indicates it suffers from weak gross profit margins of approximately 13% and its current ratio of 0.88 shows short-term obligations exceed liquid assets.

The firm also pointed to EPD’s power generation opportunities lagging behind peers, despite the company’s expansive footprint that could support natural gas logistics opportunities.

JPMorgan further noted that while EPD recently increased its buyback authorization from $2 billion to $5 billion, including $3.6 billion of currently available capacity, this appears "well telegraphed by the market, with potential to disappoint on sizing."

In other recent news, Enterprise Products Partners has been active with several significant developments. The company has announced the sale of a 40% stake in its Bahia natural gas liquids pipeline to ExxonMobil, with the transaction expected to close by early 2026, pending regulatory approvals. Alongside this, the Bahia pipeline, which spans 550 miles, is in the commissioning phase and will soon begin commercial operations. Additionally, Enterprise Products Partners has priced a $1.65 billion notes offering through its operating subsidiary, consisting of three tranches with varying maturities. UBS has maintained its Buy rating on Enterprise Products Partners, following the company’s agreement with ExxonMobil, with a price target set at $38.00.

Furthermore, Enterprise Products Partners has named Michael Hanley as its new executive vice president and chief commercial officer, effective December 1, 2025. Hanley has been with the company since 2006 and will oversee all commercial functions. In other developments, JPMorgan has downgraded MPLX LP from Overweight to Neutral, citing valuation concerns after the company’s significant year-to-date performance. The price target for MPLX remains at $57.00. These recent developments provide investors with insights into the strategic moves and financial activities of these companies.

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