Of the analysts surveyed by Bloomberg, 46.7% rate Spectra Energy (SE) as a “buy” and 46.7% rate the stock a “hold.” Only 6.6% rate it a “sell.” The consensus target price for the MLP is $32.4. Currently, its stock is trading at $26.57. If the stock reaches this target price within a year, it would mean a 22% price return for investors. Over the same period, the low and high target price for the stock is $26 and $43, respectively. Spectra Energy forms ~1.7% of the Energy Select Sector SPDR ETF (XLE).
The above table shows recommendations and target prices for Spectra Energy from some of the brokers surveyed. Among Spectra Energy’s peers, Kinder Morgan (KMI) received a “buy” rating from 53% of the analysts surveyed. It received a “hold” rating from 42% of the analysts. Of the analysts surveyed for Williams Companies (WMB), 45% issued a “buy” recommendation. It’s important to note that 93% of the analysts surveyed rated Enterprise Products Partners (EPD) a “buy.”
Outlook for Spectra Energy
Spectra Energy’s stock has a positive correlation with the US dollar-Canadian dollar exchange rate and crude oil prices. To learn more, read Key Drivers of Spectra Energy’s Stock Price. A recovery in either the Canadian dollar or oil prices could mean a higher stock price for Spectra Energy. However, this means that Spectra Energy shares could remain under pressure as long as crude oil prices and the Canadian dollar are weak.
Spectra Energy’s expected EBITDA growth should drive its dividend growth in the future. Greg Ebel, Spectra Energy’s CEO, said in the company’s 3Q15 earnings release that “We continue to demonstrate our execution advantage, placing expansion projects into service early or on schedule. In fact, the expansion projects we are putting into service in 2015 are set to contribute $135 million in annual EBITDA for the company.”