It has been about a month since the last earnings report for Enbridge (ENB Quick QuoteENB - Free Report) . Shares have added about 0.7% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Enbridge due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Enbridge Q2 Earnings In Line, Revenues Miss Estimates

Enbridgereported second-quarter 2020 earnings per share of 41 cents, in line with the Zacks Consensus Estimate, aided by higher contributions from the US Gas Transmission business and Hohe See offshore wind project. The bottom line, however, deteriorated from the year-ago quarter’s 50 cents per share owing to lower contributions from Gulf Coast and Mid-Continent liquid pipeline System.

Total revenues in the quarter declined 42% year over year to $5,779 million. Also, the top line missed the Zacks Consensus Estimate of $8,541 million.

Distributable Cash Flow (DCF)

In second-quarter 2020, the company reported DCF of C$2,437 million compared with C$2,310 million a year ago.

Segment Analysis

Enbridge conducts business through five segments — Liquids Pipelines, Gas Transmission and Midstream, Gas Distribution and Storage, Renewable Power Generation, and Energy Services.

Liquids Pipelines: The segment’s adjusted earnings before interest, income taxes, and depreciation and amortization (EBITDA) amounted to C$1,744 million, down from C$1,766 million in the year-earlier quarter. Lower contributions from Gulf Coast and Mid-Continent System primarily led to the underperformance.

Gas Transmission and Midstream: The segment’s adjusted earnings totaled C$975 million, up from C$936 million in second-quarter 2019. Higher contributions from the US Gas Transmission business drove the upside.

Gas Distribution and Storage: The unit generated profit of C$406 million compared with C$390 million in the prior-year quarter. Colder weather conditions drove the segment’s profits.

Renewable Power Generation: The segment recorded earnings of C$150 million, up from C$100 million in the prior-year quarter, thanks to Hohe See offshore wind project’s contributions.

Energy Services: The segment generated a profit of C$86 million, down from C$88 million in second-quarter 2019.

Balance Sheet

At the end of second-quarter 2020, the company reported total debt of C$67,132 million, and cash and cash equivalents of C$462 million.  Its debt-to-capitalization ratio was almost 0.50.

Guidance

For 2020, the company has reaffirmed its guidance for DCF per share at the band of C$4.50 to C$4.80. Enbridge added that it foresees annual growth of 5% to 7% through 2020 for DCF per share. 

Notably, the midstream energy player expects some unique headwinds in the second half of 2020, such as the drop in Texas Eastern system revenues, to offset the outperformance in the first half of this year.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

Currently, Enbridge has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, Enbridge has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.