Reassessing Enterprise Products Partners (EPD) Valuation After J.P. Morgan Downgrade and Growth Concerns

Enterprise Products Partners (EPD) slipped after J.P. Morgan cut its rating to Neutral from Overweight, citing slower EBITDA growth, tougher midstream competition, and skepticism about how impactful unit buybacks will be.

See our latest analysis for Enterprise Products Partners.

The downgrade comes after a solid run, with the latest share price at $32.61 and a strong 30 day share price return of 7.91 percent. The five year total shareholder return of 120.88 percent shows long term momentum is still firmly intact.

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Yet with units still trading at a discount to analyst targets and a hefty intrinsic value gap, investors now face a key question: Is Enterprise Products Partners quietly undervalued, or is the market already pricing in its next leg of growth?

Most Popular Narrative: 8.6% Undervalued

With the narrative fair value sitting above Enterprise Products Partners' last close of $32.61, the focus shifts to whether steady, compounding fundamentals can close that gap.

The completion of two gas processing plants in the Permian, along with several key pipeline and export terminal projects, is expected to enhance Enterprise Products Partners’ infrastructure, potentially driving revenue growth from increased volume handling and exports. With no major planned downtimes for the PDH plants after recent maintenance, Enterprise is poised to capture additional EBITDA that was previously lost to unplanned outages, suggesting potential earnings improvement.

Read the complete narrative.

Want to see what is really baked into that higher fair value? The narrative leans on rising margins, expanding capacity, and a richer future earnings multiple. Curious how those moving parts translate into today’s price gap?

Result: Fair Value of $35.67 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, operational hiccups at PDH facilities or a prolonged slump in Permian drilling could quickly undermine the optimistic growth and valuation assumptions.

Find out about the key risks to this Enterprise Products Partners narrative.

Build Your Own Enterprise Products Partners Narrative

If you see the story differently, or simply prefer to dig into the numbers yourself, you can build a tailored view in just a few minutes: Do it your way.

A great starting point for your Enterprise Products Partners research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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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