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Highlights

  • Jefferies raises Enbridge rating from Hold to Buy amid diversified pipeline exposure.
  • Price target increased to C$72.00 from C$65.00 on improved total return profile.
  • Enbridge preferred over TC Energy due to crude dominance and gas network reach.

Jefferies has upgraded Enbridge Inc. (NYSE: ENB | TSX: ENB) to Buy from Hold in a research note released Wednesday, citing the company’s broader opportunity set across oil and gas pipelines and a more favorable risk-reward outlook relative to peers. The firm also raised its price target for Enbridge shares to C$72.00 from C$65.00.

The upgrade is part of Jefferies’ broader reassessment of the North American midstream energy space, where it identified Enbridge as offering notable exposure to both crude and natural gas markets. Jefferies underscored Enbridge’s ownership of the Texas Eastern Transmission (TETCO) gas pipeline and its growing footprint in the Permian Basin as key assets that enhance the company’s earnings potential.

Enbridge’s dominant position in the Canadian crude oil transportation sector remains a central pillar of its value proposition, according to the note. Jefferies believes this network, combined with U.S. pipeline holdings, gives Enbridge the flexibility to participate in a range of growth-oriented projects while supporting long-term EBITDA expansion.

In comparing Enbridge to its peer TC Energy (TSX: TRP), which remains rated Hold, Jefferies cited a slightly stronger total return profile for Enbridge. This includes the projected EBITDA compound annual growth rate and dividend yield, which together create a more attractive return framework, even though the firm acknowledged the gap between the two is modest.

The analysts also noted that Enbridge screens more favorably across key financial and strategic metrics, despite broader macroeconomic uncertainties and the capital-intensive nature of the sector. While the report recognizes potential challenges such as regulatory hurdles and execution timelines, it suggests that Enbridge’s asset mix and geographic reach provide it with relatively more levers for long-term value creation.

Enbridge shares have traded in a tight range for much of the past year, reflecting market caution toward interest-rate-sensitive infrastructure names. However, Jefferies’ revised outlook signals increased conviction in the company’s ability to deliver stable earnings and maintain dividend distributions amid shifting energy market dynamics.

The updated rating and higher price target reflect a reassessment of Enbridge’s competitive positioning, with Jefferies identifying it as a more compelling name among Canadian pipeline operators based on current valuation and project optionality.