Jefferies Financial Group Inc. Reassesses Canadian Pipeline Giants: Enbridge (ENB.US) Upgraded to "Buy", Pembina Pipeline (PBA.US) Downgraded.

Jefferies Financial Group Inc. has upgraded the stock rating of Enbridge (ENB.US) from "hold" to "buy", with a target price of 72 Canadian dollars; at the same time, they downgraded the rating of Pembina Pipeline Corporation (PBA.US) from "buy" to "hold", with a target price of 53 Canadian dollars. Led by analyst Sam Burwell, the Jefferies Financial Group Inc. analyst team pointed out that Enbridge has the broadest growth opportunities in the Canadian oil and gas pipeline sector, giving it the flexibility to advance a diverse project portfolio and enhancing confidence in achieving EBITDA growth. The report emphasizes that Enbridge "has solidified its dominant position in the Canadian crude sector, owns the Texas Eastern Transmission Pipeline (TETCO) and has a nascent footprint in the Permian Basin, laying the foundation for this advantage". The analysts also stated that compared to TransCanada Corporation (TRP.US), Enbridge demonstrates better overall performance in terms of comprehensive returns (EBITDA compound annual growth rate plus dividend yield), with other key metrics also outperforming, although the advantage gap "is not particularly significant". Jefferies Financial Group Inc. believes that Pembina Pipeline's extensive presence and scale advantage in the natural gas processing, fractionation, and pipeline sectors provide it with medium to long-term development potential in the western Canadian energy landscape. However, the company faces several substantial challenges, including rate disputes with their Alliance pipeline and delays in the Dow, Inc. ethane supply for its chemical cracking facility. "The resolution of the Alliance pipeline rate dispute will eliminate a major uncertainty, with an expected outcome soon, but the extent of the rate reduction remains a key unknown," Jefferies Financial Group Inc. stated. Additionally, the company's comprehensive return metrics lack appeal compared to other midstream companies that received a "buy" rating.