Enterprise Products Partners delivers solid Q2 amid rising oil and gas prices: time to buy?

Enterprise Products Partners L.P (NYSE:EPD) reported solid fiscal Q2 results Wednesday before markets opened, beating analyst expectations on revenue and earnings. However, shares edged lower, 1.65%, despite the performance.

The company posted Q2 non-GAAP earnings per share of $0.51, beating the consensus Street estimate of $0.50. In addition, both GAAP EPS and adjusted EBITDA came in line with expectations.

Enterprise Products Partners reported top-line growth of 64.3% to $$9.45 billion, outperforming the consensus expectation by a whopping $1.54 billion. Distributable free cash flow came in flat from the same quarter last year at $1.6 billion.

Should you invest in Enterprise Products Partners shares in Q3 2021?

Since September last year, Enterprise Products Partners shares have rallied more than 50% amid rising oil and gas prices. The natural gas and crude oil pipeline company’s price plunged in March last year at the pandemic’s peak after several businesses halted operations. However, the midstream oil and gas company has now recovered to recoup a significant amount of the losses.

Nonetheless, EPD is yet to retest pre-pandemic levels, trading nearly 20% below its 2020 highs. Furthermore, the Enterprise Products Partners stock trades at an attractive P/E ratio of 13.70 and a forward P/E of 10.70. Therefore, value investors will be interested going into August, especially following a solid performance in Q2.

However, growth investors will be worried by the low earnings growth expectations. Analysts expect EPD earnings per share to fall by 17.40% this year before growing at an average annual rate of 8.40% over the next five years.

Technical overview: Enterprise Products Partners stock price forecast for Q3 2021

Technically, EPD shares appear to have pulled back to trade slightly below the 100-day moving average. However, the ascending trendline support could push the stock price back above, sparking a rebound.

Therefore, investors can target rebound profits at approximately $24.57 or higher at $25.74. The support levels are $21.95 and $20.65.

Bottom line: the case for buying EPD shares now

Although Enterprise Products Partners shares have gained more than 20% this year, the stock still trades at attractive valuation multiples, making it a target of value investors. Furthermore, the recent pullback has pushed it towards trendline support, creating a perfect scenario for a rebound. So now could be the time to invest in EPD shares.