Is There an Opportunity in Enbridge After Latest 4.5% Price Dip?

Are you wondering what to do with Enbridge stock after its recent moves? You are definitely not alone. Plenty of investors are keeping a close eye on this company, and for good reason. Enbridge has been showing real staying power in the market, with a year-to-date gain of 7.9% as well as a strong 25.3% jump over the past twelve months. Even zooming out further, the stock has soared 140.4% over the past five years, easily outpacing many peers.

Still, the last week has been a little bumpy, with a dip of 4.5%. Over the past month, Enbridge has edged down just 0.9%, reflecting a bit of volatility as energy market headlines continue to impact sentiment. Changes in risk perception or shifting expectations for interest rates could be playing a part here. Pipeline and infrastructure stocks like Enbridge sometimes react quickly to updates in these areas, even if the news is more background noise than major headline.

So, with the stock holding onto impressive long-term returns but showing signs of near-term uncertainty, everyone’s question is the same: is Enbridge fairly valued, or is there hidden potential (or risk) in its share price? By traditional valuation measures, Enbridge currently passes just 2 out of 6 checks for being undervalued. That number by itself is intriguing, but digging a bit deeper can reveal a lot more about how investors are really weighing Enbridge’s true value. By the end of this article, we will go beyond the standard formulas to look at one potentially better way to judge whether the stock deserves a spot in your portfolio.

Enbridge scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Enbridge Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model projects Enbridge's future cash flows and discounts them back to today using a required rate of return. This aims to reveal the company's actual intrinsic value compared to its current market price. This method is popular with analysts because it not only factors in growth projections, but also adjusts for risk and time, providing a nuanced view of value.

Currently, Enbridge generates Free Cash Flow (FCF) of CA$5.35 billion. Over the next several years, analysts estimate the company’s FCF will expand rapidly, reaching about CA$13.21 billion by 2029. Beyond that, forecasts assembled by Simply Wall St suggest FCFs could surpass CA$23.5 billion by 2035, although these further projections are extrapolated rather than based on analyst consensus.

According to the two-stage Free Cash Flow to Equity DCF model, Enbridge’s intrinsic value per share is estimated at CA$184.44. This implies the stock is trading at about a 63.8% discount to its calculated fair value, making it appear significantly undervalued by this measure. Even when accounting for modeling uncertainty, that is a substantial margin of safety for long-term holders.

Story Continues

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Enbridge.ENB Discounted Cash Flow as at Oct 2025

Our Discounted Cash Flow (DCF) analysis suggests Enbridge is undervalued by 63.8%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Enbridge Price vs Earnings (PE)

For profitable companies like Enbridge, the Price-to-Earnings (PE) ratio is a widely preferred valuation tool. PE helps investors quickly understand how much they are paying for each dollar of the company’s earnings. The "right" PE ratio depends not just on how much a company is earning today, but also on how fast earnings are expected to grow in the future and the level of risk faced by the business. Higher growth and lower risks generally justify higher PE ratios.

Enbridge currently trades at a PE of 23.4x. For context, this is well above the Oil and Gas industry average of around 11.9x and also above the average PE of its peers at approximately 18.6x. At first glance, this could suggest the stock is trading at a premium, especially compared to its industry.

However, Simply Wall St's proprietary Fair Ratio goes further by calculating what would be a justified PE for Enbridge specifically, based on its projected earnings growth, profit margins, risk profile, size, and industry placement. For Enbridge, this Fair Ratio is 17.8x. This metric is more reliable than a simple industry average because it accounts for the company's unique strengths and challenges rather than using a broad approach.

Comparing Enbridge’s current 23.4x PE to the Fair Ratio of 17.8x, the stock appears somewhat overvalued using this earnings-based approach.

Result: OVERVALUEDTSX:ENB PE Ratio as at Oct 2025

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Enbridge Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a clear, structured way of expressing your perspective on a company. It connects the story you believe (about future demand, risks, opportunities, or strategy) to forecasts for revenue, earnings, and profit margins, resulting in your version of a fair value. Narratives let investors bring their personal insights and convictions to the numbers, making it much easier to make confident decisions backed by both data and context.

On Simply Wall St’s Community page, millions of investors now use Narratives to map out and update their investment cases, track how fair value compares to price, and quickly see what might trigger changes in their outlook. Narratives update automatically when news, earnings, or forecasts change, ensuring you always have the freshest view without the need for spreadsheets.

For example, right now, some investors believe North American energy demand and Enbridge’s new renewables projects will fuel sustained cash flow growth, supporting a fair value of CA$77.0. Others are more skeptical, focusing on decarbonization headwinds, regulatory risk, or potential cost overruns, arriving at a much lower fair value near CA$60.0. Narratives make it simple to compare, sense-check, and adjust your viewpoint as new information arrives so you can invest smarter and with greater conviction.

Do you think there's more to the story for Enbridge? Create your own Narrative to let the Community know!TSX:ENB Community Fair Values as at Oct 2025

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ENB.TO.

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