Story updated at 9:55 a.m. to reflect market activity.
Enbridge Energy gained 0.2% to $36.15 in morning trading.
The firm maintained its "neutral" rating for the stock. Analyst Shneur Z. Gershuni cited Enbridge's announcement that it will waive its current right to receive Incentive Distribution Rights (IDRS) in the note increasing the price target.
"In consideration, the GP will receive 66.1 million Class D LP units and newly created Incentive Distribution Units (IDUs)," Gershuni wrote. "The distributions will receive the same cash distributions as Class A units. The new IDUs will earn 25% of all distributions in excess of $0.5435/unit per qtr (including its 2% GP interest). Owners of Class D units can convert to Class A units after fifth anniversary of issuance; IDUs will not be convertible or redeemable. "
Separately, TheStreet Ratings team rates ENBRIDGE ENERGY PRTNRS -LP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate ENBRIDGE ENERGY PRTNRS -LP (EEP) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 22.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 243.3% when compared to the same quarter one year prior, rising from -$83.30 million to $119.40 million.
- Net operating cash flow has slightly increased to $210.80 million or 2.37% when compared to the same quarter last year. Despite an increase in cash flow, ENBRIDGE ENERGY PRTNRS -LP's cash flow growth rate is still lower than the industry average growth rate of 17.51%.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- ENBRIDGE ENERGY PRTNRS -LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ENBRIDGE ENERGY PRTNRS -LP swung to a loss, reporting -$0.38 versus $1.25 in the prior year. This year, the market expects an improvement in earnings ($0.96 versus -$0.38).
- You can view the full analysis from the report here: EEP Ratings Report