Enterprise Products Partners L.P. (EPD) Stock Valuation — DCF Analysis
Oil & Gas Midstream · NYSE
Current Price
$37.25
Intrinsic Value
$32.21
-15.6% margin of safety
COMPETITIVE MOAT
↑Fee-Based Infrastructure Network
EPD's extensive network of pipelines and storage facilities generates stable, fee-based revenue. This infrastructure is difficult and costly for competitors to replicate, providing a significant competitive advantage.
↑Long-Term Customer Contracts
The company secures its revenue streams through long-term contracts with producers and consumers. These agreements lock in volumes and pricing, insulating EPD from short-term market volatility.
↑Scale and Diversification
EPD's large scale and diversified asset base across NGLs, petrochemicals, and refined products reduce reliance on any single commodity or region. This broad reach enhances its resilience.
INVESTMENT RISKS
↓Regulatory and Environmental Scrutiny
Midstream operations face increasing regulatory oversight and environmental concerns. Potential new regulations or liabilities could impact EPD's operating costs and expansion plans.
↓Commodity Price Sensitivity
While largely fee-based, EPD's earnings can still be indirectly affected by commodity price fluctuations. Sustained low prices could reduce producer activity and demand for its services.
↓Interest Rate Sensitivity
As a partnership with significant debt, EPD is sensitive to rising interest rates. Higher borrowing costs could impact profitability and the cost of capital for growth projects.
Base case
EPD base case valuation
A base case discounted cash flow model for EPD estimates an intrinsic value of about $32.21 per share, against a current price of $37.25. The model assumes 7.6% annual free cash flow growth, a 10.0% discount rate, and a 30x exit multiple.
Intrinsic Value
$32.21
Margin of safety
-15.6%
Expected annual return
-2.9%
Base case assumptions: 7.6% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the EPD valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Enterprise Products Partners L.P. respond.
Open DCF Calculator for EPDCompany Overview
Enterprise Products Partners L.P. delivers essential midstream energy services, connecting both producers and consumers of diverse commodities such as natural gas, natural gas liquids (NGLs), crude oil, petrochemicals, and refined products. Its operations are structured across four distinct business segments: NGL Pipelines & Services, Crude Oil Pipelines & Services, Natural Gas Pipelines & Services, and Petrochemical & Refined Products Services. The NGL Pipelines & Services division focuses on natural gas processing and associated NGL marketing. This segment oversees 19 natural gas processing facilities situated across Colorado, Louisiana, Mississippi, New Mexico, Texas, and Wyoming. Furthermore, it manages an extensive network of NGL pipelines, fractionation plants, storage sites for NGLs and related products, and NGL marine export/import terminals. Within the Crude Oil Pipelines & Services segment, the company manages crude oil pipelines, along with storage and marine terminals. A notable asset in this segment is its fleet of 255 tractor-trailer tank trucks, crucial for crude oil transportation. It also actively participates in crude oil marketing. The Natural Gas Pipelines & Services segment is dedicated to the gathering, treatment, and transmission of natural gas through its pipeline systems. This includes leasing underground salt dome natural gas storage facilities in Napoleonville, Louisiana, and owning a similar underground salt dome storage cavern in Wharton County, Texas. Natural gas marketing also forms part of its activities. Finally, the Petrochemical & Refined Products Services segment handles propylene fractionation and related marketing efforts. Its capabilities extend to butane isomerization complexes and associated deisobutanizer operations, as well as facilities for octane enhancement and the production of high-purity isobutylene. This segment additionally operates refined products pipelines and terminals, and ethylene export terminals, complementing these with refined products marketing and marine transportation solutions. Established in 1968, Enterprise Products Partners L.P. maintains its corporate headquarters in Houston, Texas.
Financial Metrics — EPD Stock Valuation Data
Revenue/Share (TTM)
$23.58
FCF/Share (TTM)
$1.01
ROIC (TTM)
10.7%
ROE (TTM)
20.0%
P/FCF
36.6x
EV/EBITDA
11.2x
FCF Yield
2.73%
Debt/Equity
1.17x
Based on trailing twelve-month data, EPD shows a free cash flow per share of $1.01 and a ROIC of 10.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 36.6x and FCF yield of 2.73% are important context metrics when evaluating EPD's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of EPD?
Enterprise Products Partners L.P. currently generates $1.01 in free cash flow per share. At the current price of $37.25, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is EPD undervalued?
EPD trades at a P/FCF ratio of 36.6x with a free cash flow yield of 2.73%. This P/FCF is in a moderate range. However, whether EPD is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value EPD stock using DCF?
To perform a DCF valuation on Enterprise Products Partners L.P.: (1) Start with the trailing free cash flow per share ($1.01) as the base, (2) project future FCF growth over 5-10 years based on Oil & Gas Midstream industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting EPD's risk profile — with a debt-to-equity of 1.17x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to EPD?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Enterprise Products Partners L.P., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Oil & Gas Midstream trends, then discounting those amounts to today's dollars. EPD's ROIC of 10.7% shows moderate capital returns.
How does WACC affect EPD stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For EPD, with a debt-to-equity ratio of 1.17x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 11.2x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See EPD PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Energy valuationsDCF and P/E value EPD with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.