Enterprise Products Earnings: Growth Announcements Restock Near-Term Pipeline for 2024

Enterprise’s third-quarter results revealed a new round of growth investments in the Permian. However, we expect to maintain our $27.50 per unit fair value estimate and wide moat rating. The $3.1 billion in new investments includes converting the Seminole pipeline to natural gas liquids from crude, two new gas processing plants, a natural gas liquids fractionator, and a new natural gas liquids pipeline. All of the new investments are supporting ongoing oil, gas, and natural gas liquids growth in the Permian basin through the end of the decade and should be online in 2025. While we think the investments are likely to yield very good returns, we also see them as largely restocking the project pipeline beyond 2023. As a result, we see them as more supportive of our near-term growth forecast versus materially increasing it.