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By David Berman

Since it was reported that Enbridge Inc.’s (ENB) pipeline in Michigan sprang a leak, spilling 20,000 barrels of oil into the Kalamazoo River earlier this week, the pipeline company’s shares have slipped all of 5% – suggesting that investors don’t see another BP PLC (BP) in the works here.

While the leak is tiny compared to the massive gusher unleashed by BP in the Gulf of Mexico, there are still uncertainties here, both financial and environmental, so it might seem odd that investors are taking such a calm approach to Enbridge so far. Well, they have good company in the form of calm analysts.

Linda Ezergailis, an analyst at TD Newcrest, reiterated a “hold” recommendation on the stock but actually raised her target price to $51 from $49 – implying a small expected gain over the next 12 months. The bump was largely due to the release of Enbridge’s in-line earnings and forecasts, but Ms. Ezergailis also addressed the leak.

“This event could affect the industry's reputation generally with the public, and might increase the scrutiny for new pipeline projects, which in turn could add to approval timelines and costs,” she said in a note.

However, she pointed out that Enbridge has the ability to pass along higher costs to shippers. At the same time, she believes that the company is a “prudent and cautious operator of its pipeline network” and therefore doesn’t seen any big additional costs.

Meanwhile, Pierre Lacroix, an analyst at Desjardins, argued that the oil spill overshadowed Enbridge’s second quarter results, but a selloff could mark a buying opportunity – suggesting that he sees more long-term upside than downside here.

“Although total costs related to the spill have not yet been assessed by ENB, we do not believe the financial impact to be significant at this time,” he said in a note. “While we continue to see the shares as near fully valued, we believe that further near-term pressure as a result of the negative news-flow could provide interested investors with an opportunity to acquire shares of Enbridge at more reasonable levels.”

He maintained a “hold” recommendation, along with a 12-month price target of $51.50.

Source: Enbridge: You Call That an Oil Spill?