Is Now the Time to Buy Enterprise Products Partners at Below $35?

Enterprise Products Partners L.P. (EPD), a leading master limited partnership (MLP) in the energy infrastructure sector, has seen its stock price dip below $35 in early 2025, according to forecasts. For investors weighing whether to enter or hold this position, the question is urgent: Does this price level represent a buying opportunity, or does it signal further downside risk? Let’s dissect the data and trends to find clarity.

Current Price Dynamics and the $35 Threshold

The May 2025 forecast for EPD’s stock price, generated via a deep-learning algorithm, shows the regular price hovering between $32.52 and $33.37 throughout the month, with the “Best possible” price climbing to $38.38 by May 31. Critically, the regular price never exceeds $35 until the final days of the month, while the “Least possible” price dips as low as $27.64 on May 2. This volatility underscores the uncertainty surrounding EPD’s near-term trajectory.

Key Drivers of EPD’s Performance

1. Energy Infrastructure Resilience: EPD’s diversified portfolio of pipelines, storage, and terminals for crude oil, NGLs, and refined products positions it as a beneficiary of stable energy demand. The company’s fee-based business model, which insulates it from commodity price swings, remains a core advantage.
2. Distribution History: EPD has maintained a steady distribution to unitholders for over two decades, a rare feat in the MLP space. While the current distribution yield of 6.8% (as of 2024) is attractive, investors must weigh it against potential cuts if cash flows falter.
3. Macroeconomic Headwinds: The forecast’s lower price range ($27–$28) aligns with scenarios of heightened interest rates or a prolonged energy market downturn. MLPs, which often carry significant debt, are sensitive to rate hikes that increase financing costs.

The Case for Buying Below $35

The data suggests two compelling arguments for entry at current levels:
- Valuation: At $32–$33, EPD trades at a discount to its five-year average price-to-EBITDA multiple of 8.5x. The forecast’s May 31 high implies a potential 17% upside by month-end.
- Technical Momentum: The upward slope in the forecast’s regular price line points to a possible breakout above $35, which could trigger renewed institutional buying.

Risks and Cautions

• Liquidity Concerns: MLPs often face reduced trading volumes during market selloffs, which could amplify losses if prices retreat toward the $27–$28 range.
• Regulatory and ESG Pressures: Growing scrutiny of fossil fuel investments could deter some buyers, even as EPD explores renewable natural gas projects to diversify its portfolio.
• Algorithm Limitations: The forecast’s disclaimer—“accuracy not guaranteed”—merits caution. Historical data and market cycles are imperfect predictors of future performance.

A Balanced Investment Strategy

Investors should consider a phased approach:
1. Dollar-Cost Averaging: Enter positions incrementally between $32 and $34, using dips to accumulate units.
2. Set Stop-Losses: Position sizing and trailing stops (e.g., at $30) can mitigate downside risk.
3. Monitor Macro Signals: Track crude oil prices (Brent above $75/bbl is supportive) and interest rate trends via the 10-year Treasury yield.

Conclusion

Enterprise Products Partners presents a compelling opportunity for long-term investors at current prices, but with caveats. The May 2025 forecast’s $32–$33 range offers entry points below $35, while the $38.38 peak highlights potential rewards. However, the $27.64 low serves as a stark reminder of downside risks tied to macroeconomic and sector-specific challenges.

For income-focused investors, EPD’s 6.8% yield and 20-year distribution history justify selective exposure, provided positions are sized to tolerate volatility. Meanwhile, traders might capitalize on the upward momentum toward $35 but should remain agile. Ultimately, EPD’s valuation and fundamentals make it worth considering—but only for those willing to navigate the MLP space’s inherent uncertainties.

Invest wisely.