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Energy Transfer LP (ET)
NYSE:ET
US Market

Energy Transfer (ET) AI Stock Analysis

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ET

Energy Transfer

(NYSE:ET)

79Outperform
Energy Transfer's strong financial performance and positive earnings call outlook are key strengths, contributing significantly to the overall score. While its valuation is attractive, technical indicators suggest caution due to bearish trends. The company’s strategic investments and high dividend yield further support a favorable long-term growth trajectory.
Positive Factors
Data Center Supply Agreements
ET is optimistic about signing more deals to supply data centers, following an agreement to supply CloudBurst's data center development in Central Texas.
Distribution Growth
Raising the price target to $22/unit primarily reflects a faster long-term distribution growth.
Growth Acceleration
ET's FY25 growth capex guidance of ~$5bn is considered a significant investment in growth acceleration, even before data center projects are added to the backlog.
Negative Factors
Capex Spending
The major point of contention is the $5bn growth capex, which is above previous growth capex spend of $2-$3bn per year.
EBITDA Performance
Q4 EBITDA of $3,884MM was slightly below Consensus of $3,978MM and our estimate of $4,002MM.
Free Cash Flow
ET projects to outspend free cash flow after distributions by $0.5B in 2025.

Energy Transfer (ET) vs. S&P 500 (SPY)

Energy Transfer Business Overview & Revenue Model

Company DescriptionEnergy Transfer LP provides energy-related services. The company owns and operates approximately 11,600 miles of natural gas transportation pipeline, and three natural gas storage facilities in Texas and two natural gas storage facilities located in the state of Texas and Oklahoma; and 19,830 miles of interstate natural gas pipeline. It also sells natural gas to electric utilities, independent power plants, local distribution and other marketing companies, and industrial end-users. The company owns and operates natural gas gathering and natural gas liquid (NGL) pipeline, processing plant, and treating and conditioning facilities in Texas, New Mexico, West Virginia, Pennsylvania, Ohio, Oklahoma, Arkansas, Kansas, and Louisiana; natural gas gathering, oil pipeline, and oil stabilization facilities in South Texas; and a natural gas gathering system in Ohio, as well as transport and supplies water to natural gas producer in Pennsylvania. It owns approximately 5,215 miles of NGL pipeline; NGL and propane fractionation facilities; NGL storage facilities with working storage capacity of approximately 50 million barrels (MMBbls); and other NGL storage assets and terminal with an aggregate storage capacity of approximately 17 MMBbls. The company provides crude oil transportation, terminalling, acquisition, and marketing activities; and sells and distributes gasoline, middle distillate, and motor fuels and other petroleum product. It offers natural gas compression service; carbon dioxide and hydrogen sulfide removal, natural gas cooling, dehydration, and British thermal unit management service; and manages coal and natural resources properties, as well as sells standing timber, leases coal-related infrastructure facilities, collects oil and gas royalty, and generate electrical power. The company was formerly known as Energy Transfer Equity, L.P. and changed its name to Energy Transfer LP in October 2018. The company was founded in 1996 and is headquartered in Dallas, Texas.
How the Company Makes MoneyEnergy Transfer makes money primarily through fee-based agreements for the transportation and storage of energy commodities such as natural gas, crude oil, and NGLs. The company operates an extensive network of pipelines and terminals, generating revenue by charging customers for the volume of products transported or stored. Key revenue streams include interstate and intrastate natural gas transportation, crude oil pipelines, and NGL logistics. Additionally, Energy Transfer benefits from its retail and marketing operations, which involve selling refined products and providing fuel distribution services. The company also engages in strategic partnerships and joint ventures to expand its infrastructure and enhance its service offerings, further contributing to its earnings. Market demand, regulatory factors, and energy prices significantly impact Energy Transfer's revenue, making it important for the company to maintain operational efficiency and strategic growth to sustain its profit margins.

Energy Transfer Key Performance Indicators (KPIs)

Any
Any
NGL Transportation Volumes
NGL Transportation Volumes
Measures the volume of natural gas liquids transported, indicating the company's operational scale and efficiency in moving energy products, which impacts revenue and market positioning.
Chart InsightsEnergy Transfer's NGL transportation volumes have shown a consistent upward trend, reaching new highs by the end of 2024. This growth aligns with the company's record-breaking financial performance and strategic investments in NGL and refined products. The recent earnings call highlighted a robust outlook, with significant capital allocated for further expansion in this segment. Despite challenges in other areas, the focus on NGL projects is expected to drive substantial earnings growth in the coming years, supported by strong demand and operational achievements.
Data provided by:Main Street Data

Energy Transfer Financial Statement Overview

Summary
Energy Transfer demonstrates strong financial health with impressive revenue growth and improved profitability. Although the increase in leverage is a concern, the company's effective cash management and growth position it well in the fossil fuels industry.
Income Statement
85
Very Positive
Energy Transfer has shown solid revenue growth with an increase from $78.59 billion in 2023 to $82.67 billion in 2024. Gross profit margin improved to 25.04% from 17.38% in the previous year, indicating enhanced operational efficiency. The net profit margin also strengthened to 5.82%, reflecting better cost management. However, EBITDA margin declined slightly to 8.94% from 15.99%, which warrants attention.
Balance Sheet
70
Positive
The company's debt-to-equity ratio decreased to 1.75 from 1.45, which indicates higher leverage and potential risk. The equity ratio improved significantly to 72.73%, reflecting stronger equity financing. ROE also increased to 10.46%, showing improved profitability from shareholder investments.
Cash Flow
90
Very Positive
Energy Transfer's free cash flow grew impressively by 79.12%, driven by robust operating cash flow. The operating cash flow to net income ratio is strong at 2.39, highlighting good cash generation relative to net income. The free cash flow to net income ratio also improved to 2.39, indicating efficient cash utilization.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
82.67B78.59B89.88B67.42B38.95B
Gross Profit
15.53B13.66B13.48B13.21B9.79B
EBIT
9.14B8.29B4.31B5.32B2.31B
EBITDA
15.40B12.56B12.29B12.63B9.54B
Net Income Common Stockholders
4.81B3.94B4.76B5.47B140.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
312.00M161.00M257.00M336.00M367.00M
Total Assets
125.38B113.70B105.64B105.96B95.14B
Total Debt
60.56B53.22B49.11B50.57B52.33B
Net Debt
60.25B53.06B48.85B50.23B51.96B
Total Liabilities
78.95B68.98B64.49B65.83B62.99B
Stockholders Equity
35.12B36.68B33.03B31.30B18.54B
Cash FlowFree Cash Flow
7.34B6.42B5.67B8.34B2.23B
Operating Cash Flow
11.51B9.55B9.05B11.16B7.36B
Investing Cash Flow
-5.90B-4.33B-4.02B-2.77B-4.90B
Financing Cash Flow
-5.45B-5.33B-5.11B-8.42B-2.39B

Energy Transfer Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price17.45
Price Trends
50DMA
18.17
Negative
100DMA
18.80
Negative
200DMA
17.34
Positive
Market Momentum
MACD
-0.30
Negative
RSI
49.82
Neutral
STOCH
84.30
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ET, the sentiment is Neutral. The current price of 17.45 is above the 20-day moving average (MA) of 17.15, below the 50-day MA of 18.17, and above the 200-day MA of 17.34, indicating a neutral trend. The MACD of -0.30 indicates Negative momentum. The RSI at 49.82 is Neutral, neither overbought nor oversold. The STOCH value of 84.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ET.

Energy Transfer Peers Comparison

Overall Rating
UnderperformOutperform
Sector (55)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
84
Outperform
$53.74B12.4931.78%6.87%4.30%10.45%
ETET
79
Outperform
$59.87B13.5913.40%7.36%5.20%18.35%
WMWMB
72
Outperform
$72.06B32.4917.92%3.26%8.06%-30.11%
KMKMI
70
Outperform
$59.66B23.218.43%4.28%2.02%5.40%
EPEPD
67
Neutral
$67.61B11.7220.78%6.73%12.71%6.74%
OKOKE
63
Neutral
$53.91B16.6818.11%4.63%24.16%-6.58%
55
Neutral
$7.10B3.56-6.61%5.99%-0.03%-51.61%
* Energy Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ET
Energy Transfer
17.45
2.62
17.67%
EPD
Enterprise Products Partners
31.22
4.08
15.03%
KMI
Kinder Morgan
26.85
8.90
49.58%
OKE
Oneok
86.31
8.48
10.90%
WMB
Williams Co
59.03
21.35
56.66%
MPLX
MPLX
52.56
13.83
35.71%

Energy Transfer Earnings Call Summary

Earnings Call Date:Feb 11, 2025
(Q4-2024)
|
% Change Since: -11.91%|
Next Earnings Date:May 06, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance with record-breaking metrics and a positive growth outlook. While there were some challenges in specific segments, the company's strategic investments and new business ventures, like the CloudBurst agreement, highlight a forward-looking growth trajectory.
Q4-2024 Updates
Positive Updates
Record-Breaking Financial Performance
Adjusted EBITDA for the full year 2024 was $15.5 billion, up 13% over 2023 and a partnership record. DCF attributable to partners was $8.4 billion, up 10% over 2023.
Operational Achievements
Record volumes moved across all segments for the year ended 2024, and a record amount of NGLs exported from Nederland and Marcus Hook terminals.
Significant Project Approvals and Investments
Recent approval of the Mustang Draw processing plant in the Midland Basin and a projected $5 billion in growth capital expenditures for 2025.
Positive Growth Outlook
2025 adjusted EBITDA expected to be between $16.1 billion and $16.5 billion, up approximately 5% from 2024 at the midpoint.
CloudBurst Data Center Agreement
A 20-year agreement to supply up to 450,000 MMBtus per day of firm natural gas to CloudBurst's data center in Texas, marking a new business venture.
Negative Updates
Challenges in Crude Oil Segment
Adjusted EBITDA for the crude oil segment was $760 million, down from $775 million in the fourth quarter of 2023, due to lower transportation revenue and reduced earnings from marketing.
Interstate Natural Gas Segment Decline
Adjusted EBITDA was $493 million compared to $541 million for Q4 2023, impacted by lower interruptible utilization and increased operating expenses.
Impact of Low Natural Gas Pricing
Decreased volumes in dry gas regions due to low natural gas pricing, affecting the midstream segment.
Company Guidance
During the Energy Transfer fourth quarter 2024 earnings call, the company provided guidance for 2025, indicating plans to spend approximately $5 billion on organic growth capital. This investment is expected to be distributed across several segments, including $1.4 billion for intrastate natural gas projects, $1.4 billion for NGL and refined products, $1.6 billion for midstream, $295 million for crude oil, and $170 million for interstate natural gas. Additionally, $100 million is allocated for new power generation facilities to enhance system reliability. Energy Transfer anticipates achieving mid-teen returns on these projects, with significant earnings growth projected for 2026 and 2027. The company also highlighted record financial performance in 2024 with an adjusted EBITDA of $15.5 billion and distributable cash flow of $8.4 billion, both marking partnership records and representing increases of 13% and 10% over 2023, respectively.

Energy Transfer Corporate Events

DividendsFinancial Disclosures
Energy Transfer Increases Quarterly Cash Distribution
Positive
Apr 23, 2025

On April 23, 2025, Energy Transfer LP announced an increase in its quarterly cash distribution to $0.3275 per common unit for the quarter ended March 31, 2025, marking a more than 3% increase compared to the previous year. This distribution will be paid on May 20, 2025, to unitholders of record as of May 9, 2025. The announcement reflects positively on the company’s financial performance and may enhance its attractiveness to investors, reinforcing its strong position in the energy sector.

Spark’s Take on ET Stock

According to Spark, TipRanks’ AI Analyst, ET is a Outperform.

Energy Transfer’s strong financial performance and positive earnings call outlook are key strengths, contributing significantly to the overall score. While its valuation is attractive, technical indicators suggest caution due to bearish trends. The company’s strategic investments and high dividend yield further support a favorable long-term growth trajectory.

To see Spark’s full report on ET stock, click here.

Business Operations and Strategy
Energy Transfer to Host Investor Sessions in Houston
Neutral
Mar 3, 2025

Energy Transfer LP announced that its management will hold informational sessions with investors and analysts at two conferences in Houston on March 4-5, 2025. These sessions will provide an overview of the company’s business segments and growth projects, potentially impacting its operations and market positioning.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.