12.03
Enbridge Inc. (ENB) – $46.30 –
Outperform, Average Risk, Price Target: $50.00 (prev. $49.00)
Management’s EPS guidance range for 2010 is $2.50 to $2.70. This compares to RBC CM’ previous estimate of $2.51 and consensus of $2.55. The midpoint of the guidance range represents a 12% increase over RBC CM’ 2009 estimate. Enbridge increased the annual dividend to $1.70/share (from $1.48). This was modestly higher than RBC CM’ estimated increase to $1.64/share. RBC CM continues to believe that investors should own shares of Enbridge for the following reasons: (1) strong and visible growth from projects currently under construction; (2) good defensive characteristics (minimal direct commodity exposure, minimal throughput exposure, well-funded capex plan); and (3) a reasonable valuation with the shares trading at roughly 18x forward EPS, which is at the midpoint of the 10-year historical range. RBC CM is bumping up its price target to $50.00 (from $49.00).
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