Enbridge Inc. ENB is expected to report first-quarter 2019 earnings on May 10, before the opening bell.
The energy infrastructure player beat the Zacks Consensus Estimate in three of the last four quarters, the average positive surprise being 31.8%. Let’s see how things are shaping up for this announcement.
Which Way Are Estimates Trending?
Let’s take a look at estimate revisions to get a clear picture of what analysts think about the company’s upcoming earnings release.
The Zacks Consensus Estimate for first-quarter earnings of 51 cents has seen one upward and a downward revision by firms in the past 30 days. It reflects a year-over-year decline of almost 38%.
Enbridge Inc Price and EPS Surprise
Enbridge Inc Price and EPS Surprise | Enbridge Inc Quote
Factors at Play
Enbridge is the operator of the longest and most advanced oil and liquids pipeline in the world. Notably, the company is responsible for the transmission of 25% North American oil. Moreover, Enbridge transports roughly 18% of the continent’s natural gas. Importantly, the company’s midstream assets connect the key markets, with most of the prolific natural gas plays in North America.
From the extensive networks of midstream properties, transporting the commodities, the company is likely to generate stable fee-based revenues.
The company is also likely to earn handsome cashflow from natural gas utility business in North America. In the continent, Enbridge is the largest natural gas utility in terms of volumes of natural gas distributed to the growing customer base.
What Does Our Model Unveil?
Our proven model does not conclusively show that Enbridge is likely to beat the Zacks Consensus Estimate in the quarter to be reported. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.
Earnings ESP: Earnings ESP represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate. Enbridge has an ESP of -3.09% as the Most Accurate Estimate stands at 50 cents while the Zacks Consensus Estimate is pegged at 51 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Enbridge currently carries a Zacks Rank #3. Though a Zacks Rank of 3 increases the predictive power of ESP, a negative ESP makes surprise prediction difficult.
We caution against Sell-rated stocks (Zacks Ranks #4 and 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Energy Stocks With Favorable Combination
Here are some companies from the energy space which, according to our model, have the right combination of elements to post an earnings beat in the upcoming releases.
Comstock Resources CRK has a Zacks Rank #2 and an Earnings ESP of +11.95%. The company is scheduled to report quarterly earnings on May 9.You can see the complete list of today’s Zacks #1 Rank stocks here.
Chaparral Energy CHAP has a Zacks Rank #2 and an Earnings ESP of +110.00%. The company is set to report first-quarter earnings on May 9.
Canadian Natural Resources Limited CNQ has a Zacks Rank #1 and an Earnings ESP of +0.85%. The company is slated to report first-quarter earnings on May 9.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Canadian Natural Resources Limited (CNQ) : Free Stock Analysis Report
Enbridge Inc (ENB) : Free Stock Analysis Report
Comstock Resources, Inc. (CRK) : Free Stock Analysis Report
Chaparral Energy, Inc. (CHAP) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research