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Enbridge (ENB) Gains But Lags Market: What You Should Know

Zacks Equity Research

Enbridge (ENB) closed at $39.92 in the latest trading session, marking a +0.45% move from the prior day. The stock lagged the S&P 500's daily gain of 0.49%. At the same time, the Dow added 0.57%, and the tech-heavy Nasdaq gained 0.67%.

Prior to today's trading, shares of the oil and natural gas transportation and power transmission company had gained 2.66% over the past month. This has lagged the Oils-Energy sector's gain of 7.29% and the S&P 500's gain of 3.03% in that time.

Investors will be hoping for strength from ENB as it approaches its next earnings release. On that day, ENB is projected to report earnings of $0.48 per share, which would represent a year-over-year decline of 2.04%. Our most recent consensus estimate is calling for quarterly revenue of $9.42 billion, up 7.65% from the year-ago period.

Investors might also notice recent changes to analyst estimates for ENB. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.23% lower. ENB is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, ENB is holding a Forward P/E ratio of 20.06. This represents a premium compared to its industry's average Forward P/E of 19.83.

Investors should also note that ENB has a PEG ratio of 3.13 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Oil and Gas - Production and Pipelines stocks are, on average, holding a PEG ratio of 4.27 based on yesterday's closing prices.

The Oil and Gas - Production and Pipelines industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 109, putting it in the top 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ENB in the coming trading sessions, be sure to utilize Zacks.com.


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