Does Recent Surge Signal New Opportunity for Enbridge Investors in 2025?

Thinking about what to do with Enbridge stock right now? You are not alone, and your timing could be spot on. This Canadian energy giant has seen its shares quietly gain momentum lately, building on both short-term rebounds and longer-term growth runs. Over the last month, Enbridge stock is up over 8% and has delivered a 33% total return in just the past year. That has caught more than a few eyes, especially as investor optimism across the energy sector continues to ebb and flow.

So, what is driving these moves? Recent market developments have highlighted both opportunities and evolving risks for Enbridge. Shifts in broader energy prices, changing investor sentiment around reliable dividend payers, and a slight discount to analyst price targets have all helped shape the current landscape. Despite some concerns about annual revenue growth, Enbridge continues to generate strong net income growth, suggesting a business model that can weather economic headwinds.

If you are trying to figure out whether the stock is undervalued, here is something to consider: based on six rigorous valuation checks, Enbridge scores 2 out of 6. That suggests some opportunity but also signals that not every metric is showing positive signs just yet.

Valuation is rarely that simple. Next, we will break down exactly how Enbridge compares across the most popular valuation methods before sharing a potentially more insightful way to look at what the market might be missing.

Enbridge delivered 33.2% returns over the last year. See how this stacks up to the rest of the Oil and Gas industry.

Approach 1: Enbridge Cash Flows

A Discounted Cash Flow (DCF) model projects a company's expected future cash flows and then discounts them back to today's values to estimate the intrinsic worth of the business. This approach is a popular method for determining what a stock might truly be worth on a standalone basis, without the influence of market fluctuations.

For Enbridge, the latest twelve months' Free Cash Flow stands at CA$5.35 billion. Looking ahead, analysts project steady cash flow growth, forecasting Free Cash Flow to reach CA$13.2 billion by 2029. When projections are extended out to a full ten years, these estimates suggest even higher free cash flow, with estimates reaching nearly CA$22.9 billion by 2035.

Based on these long-term forecasts, the DCF model calculates an estimated intrinsic value for Enbridge shares of CA$177.41. Comparing this with the current share price indicates the stock is approximately 62.4% undervalued using this method. In other words, the company's discounted future cash flows result in a value significantly higher than the price investors are currently paying in the market.

Result: UNDERVALUED

Our DCF analysis suggests Enbridge is undervalued by 62.4%. Track this in your watchlist or portfolio, or discover more undervalued stocks based on DCF analysis.

Approach 2: Enbridge Price vs Earnings

The Price-to-Earnings (PE) ratio is widely used for valuing profitable companies like Enbridge because it connects the current share price to the company’s actual earnings performance. Investors often turn to this multiple as a quick read on whether a stock is trading at a reasonable price relative to its profit-generating ability.

Growth potential and perceived risk play a big part in deciding what is considered a “normal” or “fair” PE ratio. Generally, companies with strong earnings growth prospects or stable cash flows can justify higher PE ratios, while those facing uncertain earnings or sector challenges tend to trade lower.

Enbridge currently trades at a PE multiple of 23.4x. This is significantly higher than the Oil and Gas industry average of 12x, and above the typical peer group average of 18.5x. Simply Wall St’s proprietary Fair Ratio for Enbridge, which factors in metrics like expected earnings growth, industry context, and market risks, suggests a fair value PE ratio of 17.0x for the stock. This comparison indicates the current valuation is stretched beyond what would be justified by fundamentals alone.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Enbridge Narrative

While valuation multiples and models provide a numerical snapshot, a Narrative is the story you personally create or support about a company’s future. This ties together your view on Enbridge's prospects, your expectations for its earnings, revenue, and margins, and your estimate of what the stock is really worth.

Narratives bridge the gap between the raw numbers and your investment perspective, linking the company’s journey directly to a custom financial forecast and, ultimately, a fair value target.

On the Simply Wall St platform, Narratives make this process accessible, allowing millions of investors to see, build, and update their own perspectives alongside others in the community. This provides a clear framework for why to buy or sell, based on the comparison between Fair Value and the current Price.

Importantly, Narratives are dynamic and update automatically as new news, analyst forecasts, or financial results come in. This ensures your investment thesis always stays relevant.

For Enbridge, for example, some investors may see long-term infrastructure resilience and strong cash flows justifying a fair value as high as CA$77. Others, worried about regulatory or demand risks, may have a much more cautious outlook with a fair value closer to CA$60.

Do you think there's more to the story for Enbridge? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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