Last Update 20 Jan 26

ENB: Future Returns Will Hinge On Gas Utility Execution And Dividend Stability

Analysts have nudged their price targets on Enbridge slightly higher, with recent moves such as BMO to C$67, National Bank to C$66 and Scotiabank to C$70. They cite renewed interest in the company’s natural gas and utility assets as key support for the revised outlook.

Analyst Commentary

Recent research on Enbridge clusters around a similar theme, with bullish analysts nudging price targets higher while keeping their existing rating frameworks intact. The focus is on how the company executes on its natural gas and utility deals and what investors are paying for that exposure today.

Bullish Takeaways

Bullish analysts highlight the natural gas and utility transactions as key support for their revised price targets, viewing these assets as central to Enbridge’s long term earnings mix and cash flow stability.
Price targets in the C$66 to C$70 range suggest analysts are comfortable with current valuation levels, as long as the company delivers on integration and operational targets tied to these new assets.
Some research points to the breadth of Enbridge’s regulated and contracted businesses as a positive, giving the company multiple levers for growth initiatives related to natural gas and utilities.
Bullish analysts see the current setup as offering a balance between income and potential capital appreciation, provided execution on the natural gas and utility strategy stays on track.

Bearish Takeaways

Even with higher price targets, several analysts stick with mid range ratings such as Market Perform or Sector Perform, signaling that they view upside as more measured rather than open ended.
Bearish analysts remain cautious on execution risk around integrating large utility and gas assets, which could affect cost control, timing of synergies and ultimately valuation if plans slip.
There is an ongoing focus on capital allocation, with some research implying that funding requirements for these deals, alongside existing commitments, could limit flexibility if conditions tighten.
For more cautious analysts, Enbridge’s shares are seen as fairly valued relative to their price targets, which can constrain the case for aggressive re rating without clearer evidence of stronger growth or accelerated de leveraging.

What’s in the News

Enbridge’s board declared a quarterly dividend of $0.9700 per common share, payable March 1, 2026 to shareholders of record on February 17, 2026. The company describes this as a 3% increase from the prior quarterly rate and its 31st consecutive annual common dividend increase (company event details).
The company reached a final investment decision on its Mainline Optimization Phase 1 project, a US$1.4b capital program that is expected to add 150 kbpd of Mainline capacity and 100 kbpd on the Flanagan South Pipeline. Capacity is anticipated to be available in 2027 and supported by long term take or pay contracts from Edmonton to Houston (company event details).
Enbridge is moving ahead with pump station and terminal upgrades on the Mainline and Flanagan South systems and plans to use existing Seaway Pipeline capacity to support higher heavy oil deliveries into U.S. Midwest and Gulf Coast refining markets (company event details).
Crédit Agricole Securities (USA), Deutsche Bank Securities, MUFG Securities Americas, Barclays Capital, SMBC Nikko Securities America and Truist Securities were all added as co lead underwriters for an Enbridge fixed income offering (company event details).
Separate from Enbridge, The Financial Times reported that Eni and Repsol are seeking to recover about $6b in payments related to Venezuelan operations, with contacts citing limited engagement from U.S. officials on the issue (Financial Times).

Valuation Changes

Fair Value: Model fair value remains unchanged at CA$71.12 per share, indicating no adjustment to the central valuation estimate in this update.
Discount Rate: The discount rate has risen slightly from 6.46% to about 6.46%, reflecting a very small change in the rate used to discount future cash flows.
Revenue Growth: The revenue growth assumption is effectively unchanged at about a 1.63% decline, suggesting no revision to the expected top line trend used in the model.
Net Profit Margin: The net profit margin assumption is steady at about 13.50%, with only an immaterial rounding difference in the updated figure.
Future P/E: The future P/E input has risen slightly from about 22.73x to 22.73x, indicating only a marginal tweak to the valuation multiple in the analysis.

Stable, inflation-protected cash flows and dividends are underpinned by long-term contracts, strategic asset expansion, and disciplined capital allocation in core and renewable energy markets.
Policy support, early decarbonization investments, and partnerships with top-tier customers strengthen market position, revenue diversification, and future earnings predictability.
Regulatory uncertainty, decarbonization trends, high maintenance costs, declining oil demand, and competition from alternative fuels threaten Enbridge's long-term profitability and asset utilization.

Catalysts

About Enbridge

Operates as an energy infrastructure company.What are the underlying business or industry changes driving this perspective?

Enbridge is well-positioned to capture increasing North American energy demand, driven by sustained utilization of its pipeline and midstream assets for crude oil, LNG, and natural gas, with long-term contracts and regulatory mechanisms ensuring recurring, inflation-protected revenue and resilient net margins.
The strategic build-out responding to surging electricity and data center needs-including utility-scale renewables, gas transmission expansions, and power generation projects-underpins multi-year earnings and cash flow growth as power demand accelerates through the decade.
Investment and policy focus on energy infrastructure security in the U.S. and Canada, including government incentives and indigenous partnerships, is likely to extend asset life and drive policy-supported steady cash flow growth by reinforcing Enbridge's critical incumbency and market position.
Early investment in decarbonization initiatives-such as hydrogen, renewable natural gas, and storage-and the ability to secure blue-chip customers like Meta, Amazon, and AT&T for long-term contracts diversifies and grows revenue streams, supporting both EBITDA and net margin expansion.
Disciplined capital allocation, a growing secured project backlog with higher risk-adjusted returns, and stable balance sheet management are set to drive predictable dividend growth and increasing free cash flow per share, addressing any current undervaluation as future earnings visibility strengthens.

Enbridge Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Enbridge's revenue will decrease by 3.0% annually over the next 3 years.
Analysts assume that profit margins will increase from 9.7% today to 13.3% in 3 years time.
Analysts expect earnings to reach CA$7.8 billion (and earnings per share of CA$3.53) by about September 2028, up from CA$6.2 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as CA$6.4 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 23.3x on those 2028 earnings, down from 23.4x today. This future PE is greater than the current PE for the US Oil and Gas industry at 12.2x.
Analysts expect the number of shares outstanding to grow by 0.12% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.9%, as per the Simply Wall St company report.

Enbridge Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The regulatory environment in both the U.S. and Canada is increasingly unpredictable, with project permitting delays, evolving environmental standards, and contested rate cases (such as the recent Ohio utility impairment and ongoing appeals), introducing ongoing risks of earnings disruptions, legal costs, and potential asset write-downs that can impact net margins and long-term profitability.
Accelerating global decarbonization efforts, ESG scrutiny, and government policy trends toward net zero targets threaten the long-term utilization of Enbridge's legacy oil and gas infrastructure, which, combined with slow policy support for new pipelines (e.g., the ongoing West Coast tanker ban, Canadian emissions cap, and limited progress on greenfield projects), could constrain revenue growth and depress asset values over time.
High capital expenditures required to maintain, upgrade, and expand legacy pipeline assets-exacerbated by inflation, supply chain pressures, and cost overruns (such as with the Woodfibre LNG project)-increase leverage, raise maintenance costs, and potentially lower returns on invested capital, placing pressure on net earnings and free cash flow despite growth in EBITDA.
Structural decline in North American oil demand, driven by electrification of transportation (EV adoption), rapid renewable adoption, data center and AI-related demand spikes that may plateau, and future efficiency gains may diminish long-term volume throughput for Enbridge's midstream business, impacting top-line revenue as well as the stability of recurring cash flows.
Growing competition from alternative fuel technologies (green hydrogen, renewable natural gas, battery storage), and the risk of pipeline shutdowns from environmental activism or indigenous/local opposition (despite recent progress on partnership models), could result in stranded or underutilized assets and limit Enbridge's ability to maintain or expand its earnings and dividend growth in the long run.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of CA$68.119 for Enbridge based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$77.0, and the most bearish reporting a price target of just CA$60.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be CA$58.9 billion, earnings will come to CA$7.8 billion, and it would be trading on a PE ratio of 23.3x, assuming you use a discount rate of 6.9%.
Given the current share price of CA$66.68, the analyst price target of CA$68.12 is 2.1% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

ENB: U.S. Investments And Integration Progress Will Shape Near-Term Stability