Jefferies adjusted its coverage of Enbridge Inc. (NYSE: ENB) on Tuesday, reducing the stock's recommendation from Buy to Hold even as it lifted the firm's price objective to C$76.00 from C$71.00. The move accompanies a mixed read of the company's recent operational performance and market valuation.
Quarterly performance and project commentary
Jefferies highlighted Enbridge's strong fourth-quarter EBITDA of $12.74 billion and noted the company's affirmative commentary on its Venezuela-related projects. Management expressed confidence in sanctioning the MLO2 project within the year and referenced MLO3. The broker also flagged potential upside from data center opportunities and said Enbridge expects to make final investment decisions on additional gas projects later in 2023. Despite those development updates, the company has maintained its 2026 and long-term growth guidance.
Market moves and valuation considerations
The rating revision comes as Enbridge shares have appreciated year-to-date. Jefferies said the stock has risen 12% YTD and has re-rated nearly a turn of EBITDA over the prior three weeks to reach its highest multiple since 2022. InvestingPro data cited in the review shows a 12.65% YTD price return and indicates the stock's relative strength index is in overbought territory.
On a peer basis, Enbridge is trading at roughly a 0.5x discount to TRP, a gap Jefferies views as reasonable given TRP's greater growth visibility. The firm calculates a 9% total return potential for Enbridge when accounting for dividend yield. At present, the stock offers a 5.35% dividend yield and trades at a price-to-earnings ratio of 22.76. InvestingPro analysis referenced by Jefferies suggests Enbridge is overvalued relative to its Fair Value.
Dividend track record and recent financial beats
InvestingPro data also notes that Enbridge has paid dividends for 54 consecutive years and recorded 7.39% dividend growth over the last twelve months. In its most recent reporting, the company topped expectations for fourth-quarter 2025 results, delivering earnings per share of $0.88 versus a projected $0.7874 and revenue of $8.46 billion compared with an anticipated $8.39 billion. Those stronger-than-expected figures underline a solid quarter, even as the broader valuation discussion persists.
Other items and market context
There were no recent reports of mergers involving Enbridge, and analyst opinions on the stock have not been updated recently, according to the information cited. Investors and market participants continue to monitor the company’s project sanction timelines, potential for further gas project FIDs, and valuation relative to peers as they weigh the stock’s near-term prospects.
Price and technical snapshot
At the time of Jefferies' note, Enbridge was trading at $53.88, sitting just below a 52-week high of $54.20. The broker's revised price objective to C$76.00 represents an increase in target price even as the recommendation was softened to Hold.