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Energy Transfer LP (ET)
NYSE:ET
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Energy Transfer
(NYSE:ET)81Outperform
Positive Factors
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.
Strategic Partnerships
ET is optimistic about signing more deals to supply data centers, following an agreement to supply CloudBurst's data center development in Central Texas.
Negative Factors
Financial Strain
ET projects to outspend free cash flow after distributions by $0.5B in 2025.
Energy Transfer (ET) vs. S&P 500 (SPY)
Market Cap
$60.73B
Dividend Yield7.26%
Average Volume (3M)18.78M
Price to Earnings (P/E)13.8
Beta (1Y)0.71
Revenue Growth5.20%
EPS Growth18.35%
CountryUS
Employees16,248
SectorEnergy
Sector Strength57
IndustryFossil Fuels
Share Statistics
EPS (TTM)1.28
Shares Outstanding3,431,214,800
10 Day Avg. Volume21,076,648
30 Day Avg. Volume18,782,352
Financial Highlights & Ratios
PEG Ratio0.75
Price to Book (P/B)N/A
Price to Sales (P/S)0.73
Price to Cash Flow (P/CF)5.90
P/FCF Ratio9.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$22.88Price Target Upside31.04% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
Energy Transfer Business Overview & Revenue Model
Company DescriptionEnergy Transfer (ET) is a leading energy company operating in the oil and gas industry, primarily focused on the transportation, storage, and retail of natural gas, crude oil, natural gas liquids (NGLs), and refined products. The company boasts an extensive network of pipelines and terminals across North America, facilitating the efficient movement and distribution of energy resources. Energy Transfer's core services include pipeline transportation, logistics, and storage, supporting various sectors such as residential, commercial, industrial, and energy production, thus playing a crucial role in the energy supply chain.
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 Financial Statement Overview
Summary
Energy Transfer demonstrates strong financial health, characterized by robust revenue growth and improved profitability margins. The balance sheet reflects a solid equity base, although the increase in leverage poses a potential risk. Cash flow metrics are particularly strong, showcasing effective cash management and growth. Overall, the company is well-positioned in the fossil fuels industry, with a good trajectory for future growth.Income Statement
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.85
Very Positive
Balance Sheet
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.70
Positive
Cash Flow
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.90
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 82.67B | 78.59B | 89.88B | 67.42B | 38.95B | Gross Profit |
| 15.53B | 13.66B | 13.48B | 13.21B | 9.79B | EBIT |
| 9.14B | 8.29B | 4.31B | 5.32B | 2.31B | EBITDA |
| 15.40B | 12.56B | 12.29B | 12.63B | 9.54B | Net Income Common Stockholders |
| 4.81B | 3.94B | 4.76B | 5.47B | 140.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 312.00M | 161.00M | 257.00M | 336.00M | 367.00M | Total Assets |
| 125.38B | 113.70B | 105.64B | 105.96B | 95.14B | Total Debt |
| 805.00M | 53.22B | 49.06B | 49.84B | 52.25B | Net Debt |
| 805.00M | 53.06B | 48.80B | 49.50B | 51.89B | Total Liabilities |
| 78.95B | 68.98B | 64.49B | 65.83B | 62.99B | Stockholders Equity |
| 46.02B | 36.68B | 40.66B | 23.00M | 6.00M |
| Cash Flow | Free Cash Flow | |||
| 7.34B | 6.42B | 5.67B | 8.34B | 2.23B | Operating Cash Flow |
| 11.51B | 9.55B | 9.05B | 11.16B | 7.36B | 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
Negative
17.46
Price Trends
19.57
Negative
18.45
Negative
16.85
Positive
Market Momentum
-0.49
Positive
27.68
Positive
13.30
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ET, the sentiment is Negative. The current price of 17.46 is below the 20-day moving average (MA) of 19.26, below the 50-day MA of 19.57, and above the 200-day MA of 16.85, indicating a neutral trend. The MACD of -0.49 indicates Positive momentum. The RSI at 27.68 is Positive, neither overbought nor oversold. The STOCH value of 13.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ET.
Energy Transfer Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
85 Outperform | $53.50B | 12.43 | 31.78% | 6.91% | 4.30% | 10.45% | |
81 Outperform | $60.73B | 13.78 | 13.40% | 7.26% | 5.20% | 18.35% | |
73 Outperform | $131.05B | 25.68 | 8.26% | 6.21% | 24.95% | -17.19% | |
71 Outperform | $66.59B | 30.06 | 17.92% | 3.48% | 8.06% | -30.11% | |
68 Neutral | $58.46B | 22.48 | 8.54% | 4.37% | -0.55% | 10.02% | |
64 Neutral | $56.03B | 17.35 | 18.11% | 4.46% | 24.16% | -6.58% | |
57 Neutral | $8.34B | 5.35 | -5.98% | 7.29% | 0.20% | -69.45% |
* Energy Sector Average
Performance Comparison
ET
Energy Transfer
17.46
3.53
25.34%
KMI
Kinder Morgan
26.14
9.06
53.04%
OKE
Oneok
89.57
15.69
21.24%
WMB
Williams Co
54.38
18.85
53.05%
MPLX
MPLX
52.70
15.20
40.53%
TSE:ENB
Enbridge
61.01
15.49
34.02%
Energy Transfer Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: -11.86% | Next Earnings Date: Apr 30, 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.Highlights
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.
Lowlights
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
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.
DividendsFinancial Disclosures
Energy Transfer Announces Distribution Increase and Earnings Release
Positive
Jan 27, 2025
On January 27, 2025, Energy Transfer LP announced an increase in its quarterly cash distribution to $0.3250 per common unit for the fourth quarter ended December 31, 2024, marking a 3.2% increase compared to the previous year. This cash distribution is scheduled to be paid on February 19, 2025, to unitholders of record as of February 7, 2025. Additionally, Energy Transfer plans to release its fourth-quarter and full-year 2024 earnings on February 11, 2025, followed by a conference call to discuss the results and provide a 2025 outlook, signifying a positive step in their financial strategy and stakeholder engagement.
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.