Enbridge Earnings: Momentum Continues Across All Segments

Key Morningstar Metrics for Enbridge

• Fair Value Estimate
  : C$75.00
• Morningstar Rating
  : ★★★
• Morningstar Economic Moat Rating
  : Narrow
• Morningstar Uncertainty Rating
  : Medium

What We Thought of Enbridge’s Earnings

Enbridge’s ENB EBITDA for the first quarter came in at C$5.8 billion, slightly above the C$5.7 billion PitchBook consensus. Cone, a new Brenewables project, added USD 700 million to the sanctioned program, while smaller projects in the gas transmission segments were commercialized.

Why it matters: Renewable investments show the preference of Meta, but also the acute tightness of new power generation. There are certainly more opportunities here than we initially expected a year ago.

• With new gas turbine backlogs pushed into the 2030s, renewables will play an important role for incremental capacity. Management’s comments reflect that, stating the uncommitted backlog for the segment has been growing for the 2028-29 time period.

The bottom line: We are increasing our fair value estimates to C$75 per share, almost entirely driven by our new cost of capital methodology. Our new cost of capital is reduced to 5.6% from 5.8%.

• We now see shares in 3-star territory, trading in line with our new fair value.
• Our narrow moat rating, Medium Uncertainty Rating, and Standard Capital Allocation Rating remain unchanged.

Coming up: The liquids pipelines took a dip this quarter, driven by resetting tolls on the Mainline and earnings sharing with shippers. However, Lower 48 assets may see some resurgence as demand for US crude picks up due to disruptions in the Middle East.

• Producers have begun picking up additional rigs as the back end of the futures curve firmed up and looks to average USD 89 and USD 77 per barrel in 2026 and 2027, respectively. This will benefit primarily the US-oriented assets as the Mainline remains near or at capacity.
• There was also an update on the Line 5 replacement project, as initial site work has begun. Legal challenges remain to remove the pipeline, but we do not believe they will be able to stop development.