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Investors Heavily Search Enbridge Inc (ENB): Here is What You Need to Know

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Enbridge (ENB) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Over the past month, shares of this oil and natural gas transportation and power transmission company have returned +4.8%, compared to the Zacks S&P 500 composite's +1.7% change. During this period, the Zacks Oil and Gas - Production and Pipelines industry, which Enbridge falls in, has gained 4.2%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Earnings Estimate Revisions

Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

Enbridge is expected to post earnings of $0.52 per share for the current quarter, representing a year-over-year change of +10.6%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

For the current fiscal year, the consensus earnings estimate of $1.97 points to a change of -4.8% from the prior year. Over the last 30 days, this estimate has changed -0.8%.

For the next fiscal year, the consensus earnings estimate of $2.16 indicates a change of +9.5% from what Enbridge is expected to report a year ago. Over the past month, the estimate has changed -0.8%.

With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Enbridge.


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