To Buy or Not to Buy Enterprise Products Stock Before Q2 Earnings?

Core Viewpoint - Enterprise Products Partners LP (EPD) is expected to report second-quarter 2025 results on July 28, with earnings estimated at 65 cents per share, reflecting a 1.6% increase year-over-year, and revenues projected at $14.2 billion, indicating a 5.4% rise from the previous year [1][6]. Financial Performance - The Zacks Consensus Estimate for EPD's second-quarter earnings is 65 cents per share, with revenues expected to reach $14.2 billion [1][6]. - EPD has beaten earnings estimates in one of the last four quarters and missed in three, with an average negative surprise of 0.8% [2]. - The partnership has an Earnings ESP of +0.90% but currently holds a Zacks Rank 4 (Sell), indicating a lower likelihood of an earnings beat this time [3]. Business Operations - EPD is a leading provider of midstream services in North America, with a pipeline network of 50,000 miles, transporting natural gas, NGLs, crude oil, refined products, and petrochemicals [4]. - The company is expected to generate stable fee-based revenues and cash flows, supported by a storage capacity exceeding 300 million barrels for various products [4][6]. - The gross operating margin for EPD's NGL Pipelines & Services segment is estimated at $1,416.5 million, up from $1,325 million a year ago [5][6]. Market Position - EPD's stock has increased by 13.8% over the past year, slightly outperforming the industry average of 12.9% [12]. - The current trailing 12-month EV/EBITDA ratio for EPD is 10.18, compared to the industry average of 11.51, indicating that EPD is trading at a discount [15]. Investment Strategy - EPD is investing $7.6 billion in growth projects, including new pipelines and gas processing plants, with a significant portion of its 2026 spending already allocated to approved projects [17]. - The company faces risks associated with its high spending commitments, particularly if market conditions deteriorate, potentially leading to lower-than-expected returns [18].