Key points
- Could pipeline disruptions hurt Enbridge (TSX: ENB)(NYSE: ENB) stock this week?
- Investors should look for the future investments that Enbridge hopes to make for long-term cash.
- Enbridge may raise its full-year guidance based on several strategic moves in the last few months.
Pipeline company Enbridge will announce its third-quarter earnings report on Friday, Nov. 5 on the TSX. The report comes as Enbridge stock soars near not just 52-week highs, but all-time highs once more. Amid oil and gas prices climbing, the company has its Line 3 pipeline up and running. But in the last few months, protestors in Michigan have put a wrench in expansion plants.
So, ahead of Enbridge stock’s earnings next week, let’s look at some key areas where Motley Fool investors should pay attention.
1. Earnings
Motley Fool investors can likely already guess that production and pipeline use is up for Enbridge stock. This comes from two major sources. The first, of course, is that Enbridge has Line 3 up and running, with full operation by the end of this year.
But beyond Line 3, Enbridge stock also announced the acquisition of the Ingleside Energy Center, the leading light crude export platform in North America on the United States Gulf Coast. It’s an investment that should come online “immediately,” with “about 90% contracted cash flows.” This adds even more long-term cash to the already well-supported pipeline company.
What’s not as clear is whether Enbridge stock can keep up with other pipeline companies and their partnerships, and if this translates to immediate growth for the company. Unfortunately, Enbridge has been the focus of a sea of protests.
Still, on average analysts expect Enbridge stock to report earnings per share of $0.75 for the quarter — an increase of 34% year over year.
2. Restructuring
Motley Fool investors are likely not alone when they ask to see what else Enbridge stock has planned in the future. And this comes down to focusing on renewable energy projects. Other pipeline companies created partnerships over the last year to bring down energy emissions, sure. But on the TSX today, it’s also important to shift so that these energy giants remain giants.
Enbridge stock has made these partnerships, most recently with Vanguard Renewables. The partnership creates a renewable natural gas (RNG) deal that will see a US$75 million project to build eight sites across the United States. This is where “organic waste will be transformed into carbon-neutral RNG” of “pipeline quality natural gas.”
“As a leader in energy transition, Enbridge has committed to achieving net-zero greenhouse gas emissions by 2050 and is excited to partner with industry leaders such as Vanguard Renewables who are developing new sources of clean energy and helping companies reduce their emissions,” said Bill Yardley, Enbridge’s executive vice president and president, Gas Transmission and Midstream.
3. Guidance
So, with these new projects and pipelines underway, will Enbridge stock update its guidance? During the last report, Enbridge reaffirmed its original full-year guidance. For 2021, the company believes it will reach an EBITDA range of between $13.9 billion and $14.3 billion. This would come to discounted cash flow (DCF) of between $4.70 and $5 per share.
Whether this is increased or reaffirmed is the question.
Enbridge stock, as mentioned, will report its third-quarter results before the markets open on Friday, Nov. 5.
