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Investing.com - Mizuho (NYSE:MFG) has reduced its price target on Enterprise Products Partners (NYSE:EPD) to $38.00 from $39.00 while maintaining an Outperform rating on the stock. The midstream energy giant, currently valued at $69.5 billion, trades near its 52-week high of $34.63, with InvestingPro analysis suggesting the stock remains slightly undervalued.
The firm cited "petchem headwinds" and a "modified volume outlook within NGL Pipelines" as key factors behind the price target reduction, according to a research note released Friday.
Despite these challenges, Mizuho emphasized that Enterprise Products Partners possesses a "simpler near-term message focused on visible associated natural gas growth in the Permian" and a preliminary outlook for reduced capital expenditures in fiscal year 2026 and beyond.
The research note addressed recent ethane export restrictions, suggesting that while they were a topic of investor concern, the direct and indirect impacts in the second quarter of 2025 would likely be "manageable in the context of EPD’s scale."
Mizuho also highlighted Enterprise Products Partners’ brownfield expansion potential across its "wellhead-to-water" NGL corridor from the Permian Basin, which the firm believes supports "capital-efficient growth" and reinforces the outlook for lower run-rate capital expenditures.
In other recent news, Enterprise Products Partners announced a quarterly cash distribution increase of 3.8% for the second quarter of 2025, amounting to $0.545 per unit. The company also revealed it had repurchased $110 million of its common units in the second quarter, utilizing 65% of its $2 billion buyback program. Additionally, Enterprise Products Partners priced a $2 billion public offering of senior notes, with proceeds intended for growth investments, acquisitions, and debt repayment. The company has received a Hold rating from TD Cowen, which expressed concerns about potential underutilization of new assets. UBS maintained its buy rating with a price target of $40, adjusting its Q2 2025 EBITDA estimate to $2,420 million. Enterprise Products Partners also reported receiving a letter from the U.S. Bureau of Industry and Security, though details of the letter were not disclosed. These developments highlight the company’s ongoing financial activities and analyst perspectives.
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