How the Williams Pipeline Partnership Talks Could Impact the Value of EPD in 2025

Thinking about what to do with your Enterprise Products Partners shares? You are definitely not alone. With EPD's stock closing just under $32 recently, plenty of investors are wondering whether it is the right moment to buy, hold, or rethink their position. The stock has turned in a sturdy total return of nearly 17% over the past year and an impressive 47% over the last three years, easily outpacing broader energy sector benchmarks. That kind of growth tends to grab attention, but it is the why behind those numbers that really matters.

Recent gains can largely be traced to strong quarterly earnings and steady revenue growth. These factors have reassured investors about the company’s resilience in tougher energy markets. There has also been a noticeable narrowing of EPD’s discount to analyst price targets. This is often a sign that the market is reassessing risk and beginning to price in better outlooks for the industry and for Enterprise Products Partners specifically. The numbers drive the story. Revenue is growing, net income is up, and the company currently trades at nearly a 50% discount to its calculated intrinsic value.

Now, when it comes to valuation, a basic scorecard puts Enterprise Products Partners at 5 out of 6 on key undervaluation checks. There is plenty to like, but a closer look under the hood is essential before making your next move. Next, we will unpack the valuation approaches that matter most for EPD investors, followed by what I think is an even more illuminating way to judge its real value.

Enterprise Products Partners delivered 16.7% returns over the last year. See how this stacks up to the rest of the Oil and Gas industry.

Approach 1: Enterprise Products Partners Cash Flows

A Discounted Cash Flow (DCF) model is a popular method for valuing companies by projecting their future cash flows and discounting them back to today’s dollars. This approach helps investors estimate a business’s intrinsic worth.

Enterprise Products Partners currently generates Free Cash Flow (FCF) of nearly $5 billion. Analyst projections suggest this figure is set to grow steadily over the next decade, reaching about $7.7 billion by 2035. These projections are based on both historical trends and analyst consensus, taking into account expected industry conditions and the company’s ability to maintain cash-generating operations.

Using the DCF model, the estimated intrinsic value for Enterprise Products Partners is approximately $62.89 per share. With the recent share price just under $32, the stock appears to be about 49.3% undervalued at current levels.

This discount indicates a potentially significant margin of safety for long-term investors, particularly those emphasizing strong, growing free cash flow and disciplined capital allocation.

Result: UNDERVALUED

Our DCF analysis suggests Enterprise Products Partners is undervalued by 49.3%. Track this in your watchlist or portfolio, or discover more undervalued stocks based on DCF analysis.

Approach 2: Enterprise Products Partners Price vs Earnings

The price-to-earnings (PE) ratio is one of the most trusted metrics for valuing consistently profitable companies, such as Enterprise Products Partners. It gives investors a quick sense of what the market is paying for each dollar of current earnings. This makes it particularly useful for mature businesses with steady cash generation.

A company’s “normal” or “fair” PE depends on several factors, including how quickly its earnings are expected to grow and how risky its outlook appears. Fast-growing companies or those with unique stability often command higher PE ratios. In contrast, riskier or slower-growing businesses tend to trade at lower multiples.

Enterprise Products Partners is currently trading at a PE ratio of 11.9x. This is below both the Oil and Gas industry average of 13.2x and the major peer average of 19.0x. Simply Wall St’s proprietary Fair Ratio, which takes into account earnings growth, industry landscape, margin quality, market size, and risks, is 16.0x for EPD. In simple terms, this suggests the stock is trading noticeably below what would be considered fair value for a company of its quality and outlook.

With EPD’s actual PE ratio well beneath both the industry benchmark and its Fair Ratio, the stock appears undervalued using this approach.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Enterprise Products Partners Narrative

Beyond traditional ratios, Narratives offer a smarter, story-driven way to make investment decisions by connecting your view of Enterprise Products Partners’ future, such as where revenues, earnings, and margins are headed, to your estimate of fair value today.

Simply put, a Narrative is your story about the company, built from your assumptions about business performance and the numbers you expect to see. It links your financial forecast with a concrete fair value so you can see in clear terms if the current price looks attractive, risky, or somewhere in between.

On the Simply Wall St platform, building your own Narrative is as accessible as answering a few guided prompts, then instantly seeing how your conviction stacks up against millions of others in the community. As new news or earnings emerge, your Narrative updates on the fly to reflect the latest picture.

This dynamic approach empowers you to compare your view with others and, crucially, to react when the story changes. This makes it easier to decide whether to buy, sell, or hold at any moment by simply checking if your fair value is above or below today’s share price.

• For Enterprise Products Partners, for example, one investor might see fair value as low as $32, sticking close to the most cautious outlook, while another might believe the future is much brighter and peg fair value at $40. Your Narrative helps make sense of these differences and pinpoints what you believe is most likely.

Do you think there's more to the story for Enterprise Products Partners? 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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