$36.46
$69.42
bear $36.46
base $58.24
bull $69.42
margin of safety $35.00
market price* $36.82
Enterprise Products Partners runs one of the largest midstream energy networks in North America: about 50,000 miles of pipelines, natural gas processing plants in the Permian Basin and other basins, the NGL fractionation and storage hub at Mont Belvieu, Texas, and Gulf Coast export docks for LPG, ethane, crude oil and petrochemicals. Most of its margin is fee-based, often under minimum-volume commitments; a smaller part (marketing, sales of NGLs it keeps from processing, and petrochemical spreads) moves with commodity prices. Reported revenue swings with oil and NGL prices because it includes the value of product bought and resold, so we judge the business on cash flow, not revenue. How we measure its cash. We start with operating cash flow, remove working-capital swings, charge the equity-based pay the partnership gives employees (about $200 million a year, paid in new units) and deduct the partnership's disclosed sustaining capital spending, the money needed to keep existing assets running ($595 million in 2025, $654 million in 2024). We use the disclosed figure rather than a formula tied to revenue, because revenue here tracks commodity prices, not capacity. On that basis owners' cash per unit was $1.87 in 2016, $2.96 in 2019, $2.81 in 2020, $3.45 in 2022, $3.43 in 2023, $3.55 in 2024 and $3.62 in 2025. The 2025 total, $7.92 billion, agrees within $13 million with the distributable cash flow the partnership itself reports. Adding back the $1.35 billion of cash interest paid gives $9.27 billion of cash produced by the business before its lenders in 2025. Our starting level is the median of 2023-2025, about $9.03 billion, which describes the network as it exists after the 2022 Navitas acquisition and the recent build-out. What 2026 tells us. Owners' cash grew 2.0% per unit in 2025 (2.6% before interest). We assume about 6% growth in 2026, to roughly $9.85 billion before interest, because specific assets entered service in the past year: the Neches River ethane/propane export facility (phase 1 July 2025, phase 2 first half of 2026), the Bahia NGL pipeline from the Permian to Mont Belvieu (December 2025; Enterprise keeps a 60% share after selling 40% to ExxonMobil for $655 million), Fractionator 14, the second Mentone West processing train (early 2026) and the Occidental gathering system bought in 2025. First-half 2026 operating cash before working-capital swings rose about 15%, but roughly $200 million of second-quarter margin came from an acute, temporary surge in overseas demand for US energy during the Middle East conflict, which management says had largely normalized by the end of June. Excluding it, growth was about 10%. We do not build that windfall into the ongoing level. Growth we credit. Projects under construction with dated completions (the Athena processing train and Ref 4 LPG export expansion at the Houston ship channel terminal in late 2026, and the expansion of Bahia to 1.0 million barrels a day plus the 92-mile Cowboy extension with ExxonMobil in late 2027) lift the base case to about $10.55 billion by 2028. We deduct the roughly $2.0 billion still needed to finish them. Beyond that we credit only what the partnership has repeatedly shown it can do: for decades it has invested $2-4 billion a year in new capacity, largely from cash kept back after distributions, including through the 2015-16 and 2020 downturns. The base case assumes $2.0 billion a year from 2027 through 2035 (the recently approved Plant 11 and Plant 13 processing plants and Fractionator 15 fall inside this), earning about 10% before interest, close to what its 2018-2025 spending has earned, and every dollar of that spending is deducted. We give no credit to growth that depends on new basins, market share or management targets. An accounting judgement on upkeep. Disclosed sustaining spending (about $600 million) is far below depreciation (about $2.6 billion). Much of that gap reflects long-lived pipe and storage depreciated at today's construction costs, but one category the partnership counts as growth is really upkeep: connecting new wells to its gathering systems in the Delaware and Midland basins, which keeps processing volumes from declining. While growth investment continues this is covered; once our base case stops crediting new investment after 2035, we charge $400 million a year to hold gathering volumes flat. How long it lasts. Pipelines, rights-of-way, the Mont Belvieu storage and fractionation complex and the export docks have run for decades and are maintained by the sustaining spending already deducted. The base case holds earning power flat from 2036 to 2055 and fades it to zero by 2070; we cannot point to evidence that volumes last longer, so we give them no value. About 59% of base-case value comes after 2035, so the durability of the network is the largest single assumption. Debt. At June 30, 2026 the partnership owed $33.5 billion of principal, mostly fixed-rate at a weighted average of about 4.65%, with an average remaining life of roughly 17 years. It is investment grade and leverage is about 3.0 times cash flow. Because most of it is fixed for many years at a cost below what new long-term borrowing would require, its remaining payments are worth about $29.5 billion today. With $44 million of preferred units, claims ahead of common unitholders total about $29.5 billion, or $13.55 per unit. About 1% of cash flow belongs to outside partners in consolidated subsidiaries and is removed before valuing. Maturities over 2026-2028 run about $1.6-2.0 billion a year, and even in the bear case the business's cash before interest covers its interest bill about five to six times, so refinancing is not a live risk in any case. Bear case: commodity-linked margin fades and new capacity runs below plan, so cash before interest is about $9.6 billion in 2026-27 and $9.8 billion from 2028. A downturn like 2020, when owners' cash per unit fell 5%, hits 2029-30. Sustaining spending runs $300 million a year higher (it roughly doubled from 2020 to 2024). There is no new growth investment. Permian supply peaks around 2030, the way Eagle Ford (2015) and the Bakken (2019) peaked about a decade into their booms, so volumes fall 2% a year from 2031 and the network fades to zero by 2060. The business is worth about $109.1 billion; less $29.5 billion owed, owners keep about $79.5 billion, or $36.46 per unit. Base case: the in-service and under-construction projects deliver, $2 billion a year of reinvestment continues through 2035, gathering upkeep is charged thereafter, and earnings hold through 2055 before fading. The business is worth about $156.6 billion; less $29.5 billion owed, owners keep about $127.0 billion, or $58.24 per unit. Bull case: the partnership's identified levers execute: cash before interest of about $10.0 billion in 2026 and $10.8 billion by 2028 with the Bahia expansion full; investment continues at $3.0 billion a year through 2037 (its 2023-2025 pace was $2.8-4.4 billion) at about 11% returns; the network runs flat through 2065 with $300 million a year of gathering upkeep and fades by 2080. The business is worth about $181.0 billion; less $29.5 billion owed, owners keep about $151.4 billion, or $69.42 per unit. What changed since our previous estimate ($37.82, $59.04 and $71.99). The second quarter's strength was partly a temporary demand surge that has since faded, so we do not carry it forward. The partnership raised its 2026 growth spending plan to $2.9-3.4 billion (net of asset sales) from $2.5-2.9 billion, so more money remains to be spent on projects already under way. We now charge for the well connections needed to keep gathering volumes from shrinking, and our bear case now allows for Permian supply peaking around 2030. Partly offsetting these, the newly approved Plant 11, Plant 13 and Fractionator 15 fall inside the reinvestment we credit from 2027, and the debt's remaining payments are worth slightly less. The net effect is a small decline in all three cases. Margin-of-safety price. We are fairly sure of the earnings level: most margin is contracted and fee-based, our cash figure ties to the partnership's own reported figure, distributions have been covered about 1.7-1.9 times, and owners' cash per unit fell only 5% in 2020. The worst plausible outcome is a lasting decline in Permian and Gulf Coast volumes combined with a commodity slump and a larger maintenance bill as the network ages; outside our cases sit a change in the federal tax treatment of publicly traded partnerships and a major hurricane disabling Gulf Coast terminals for months. The structure would survive any of these: the debt is long-dated, fixed and investment grade, and the Duncan family's EPCO, which controls the general partner, has run the business conservatively for decades. The three things we are most likely to be wrong about are how long the network keeps earning after 2035, what new projects actually earn, and the true cost of upkeep; if all three go against us together the units are worth roughly our bear case, about $36. The price assumes a holding period of about four years, over which the business pays $2.24 per unit a year in distributions, with the retained cash reinvested. For a 20% annual return over four years from $35, the units need about $73 of value plus distributions by 2030; the base case, compounding its distributions and reinvestment, reaches about that. From $35 even the bear case implies the starting value plus distributions. So the margin-of-safety price is about $35. Enterprise is a limited partnership: investors hold common units and receive a K-1 tax form.