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Enbridge (ENB) Down 5.5% Since Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Enbridge Inc (ENB - Free Report) . Shares have lost about 5.5% in that time frame.

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

First-Quarter 2018 Results

Enbridge’s first-quarter 2018 results showed improvement on higher liquid delivery volumes from the Canadian Mainline and Lakehead System. Contributions from acquisitions and new projects also led to the impressive performance.

Adjusted earnings per share came in at 82 Canadian cents, higher than the year-ago quarter’s 57 Canadian cents. The bottom line also surpassed the Zacks Consensus Estimate by 70.8%.

Total revenues in the quarter rose 14.2% year over year to C$12,726 million and beat the Zacks Consensus Estimate by 23.7%.

Segment Analysis

Liquids Pipelines: Adjusted operating income at this segment was C$1,627 million, up almost 23% from C$1,325 million a year ago. Higher delivery of liquids from the Canadian Mainline and Lakehead System led to the upside.

Gas Transmission and Midstream: The segment reported earnings of C$1,046 million, skyrocketing from C$472 million in first-quarter 2017. Contributions from acquisitions and new projects drove the upside.

Gas Distribution: This business unit reported profit of C$646 million, up more than 69% from C$381 million in the January-March 2017 quarter. Higher volumes and rise in demand from active customers supported the upside.

Green Power and Transmission: This segment saw earnings of C$139 million, higher than C$101 million recorded in the prior-year quarter.

Energy Services: The segment reported earnings of C$22 million against a loss of C$4 million in first-quarter 2017.

Total Expenses

During the first quarter, the company reported total operating expenses of C$11,848 million, up 21% from C$9,788 million in the January-to-March quarter of 2017.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared with two lower.

Enbridge Inc Price and Consensus

 

Enbridge Inc Price and Consensus | Enbridge Inc Quote

VGM Scores

At this time, ENB has a great Growth Score of A and a grade with the same score on the momentum front. The stock was also allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

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

Based on our scores, the stock is equally suitable for growth and momentum investors while value investors may want to look elsewhere.

Outlook

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




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