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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: Glenn Petersen who wrote (175711)	5/9/2013 11:02:40 AM
From: Dennis Roth	1 Recommendation Read Replies (1) of 206181

Enbridge. Inc. (ENB.TO) Gangbusters growth; Raising 2013 Estimates & Target Price to C$52 (from C$48) A. M. Kuske 08 May 2013, 13 pages doc.research-and-analytics.csfb.com Earnings review: Enbridge reported Q1 2013 headline diluted EPS of C$0.31 and an adjusted C$0.62. The adjusted figure exceeded our C$0.52 estimate and the Street's C$0.518 (C$0.48-C$0.57 range). Despite the beat, the 2013 annual guidance was affirmed at C$1.74-C$1.90. We continue to be very impressed with Enbridge's ongoing level of growing capital projects from the core asset base. For several reasons, we believe Enbridge faces a structural advantage with asset positioning and capital market access. Thus, we are increasing our target price to C$52 from the previous C$48. We also reiterate our Outperform rating. Selected highlights: Notable points include: (a) average Canadian Mainline volumes increased 5.7% from Q1 2012; (b) the Regional Oil Sands System average volumes increased 38.7% from Q1 2012; and, (c) before the earnings release, ENB announced a $1.2bn investment in preferred units of Enbridge Energy Partners. From the release, the EEP investment has no incremental funding requirement for ENB. Investment thesis: We believe Enbridge has an attractive and unique asset base capable of sustained growth. In our view, Enbridge may be viewed as a core holding, with one of North America's largest infrastructure footprints. Valuation: In our view, a growing secured project backlog combined with an attractive interest rate environment creates a solid foundation for ENB's valuation. Our revised C$52 target price (up from C$48) is derived largely from a targeted dividend yield of 2.7% and an imputed 70-bps spread over a 2% Canadian 10-year bond yield. After the quarter we adjust our 2013 EPS to C$1.87 from C$1.83. We reiterate our Outperform rating.

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