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Credit Suisse has a Neutral rating on Enbridge Inc. but raised its Target Price to $62 from $58.

Earnings highlights: "Enbridge Inc. reported Q4 2010 headline diluted EPS of C$0.86 and diluted adjusted EPS of C$0.63 - identical to our view. That figure missed the Street's C$0.686 consensus and was at the bottom end of the C$0.63-C$0.76 range. We note the following: (a) positive statements on the longer-term outlook with adjusted EPS growth anticipated at "an average rate of 10% through the middle of this decade, and with cash flow growing even more rapidly" leading to expectations of "exceptional dividend growth"; (b) a shift in the liquids segment's quarterly earnings patterns related to the Enbridge System along with weaker volumes on the feeder pipes translated into weaker earnings; and, (c) Sponsored investments results were rather messy given the pipeline leaks suffered by Enbridge Energy Partners ( EEP )."

Selected highlights: "Notable points include: (a) in a separate release, ENB announced the C$145m acquisition of an additional 6.8% interest in Noverco from GDF Suez; (b) average Enbridge System volumes increased 4.8% from Q4 2009 and increased by 3.5% from Q3 2010 levels; and, (c) ENB's capital allocation continues into multiple areas, including: liquids related businesses; natural gas processing; gas distribution; and, largely government-backed or utility sanctioned varied renewable generation (wind, solar and geothermal)."

Investment thesis: "We believe Enbridge has an attractive and unique asset base capable of sustained growth. In our view, Enbridge may be viewed as a core holding with one of North America's largest infrastructure footprints."

Valuation: "After revisiting valuation and considering our 2012 forecasts, we increase our target price to $62.00 from the previous $58.00. That target price is obtained from multiple valuation approaches, including: a 19.5x P/E multiple on 2012e EPS; a 3.3% dividend yield; and, an 11.5x EV/EBITDA multiple. We reiterate our Neutral rating."

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