Can ET's Growing NGL Export Infrastructure Place it for Global Growth?

Core Viewpoint - Energy Transfer LP (ET) is positioned to benefit from increasing global demand for U.S. natural gas liquids (NGL) through strategic expansion of its export infrastructure, particularly at key terminals like Nederland and Marcus Hook [1][9]. Group 1: Export Capacity and Market Position - Energy Transfer has significant export capacity, capable of shipping over 1.1 million barrels per day of NGLs and 1.9 million barrels per day of crude oil, with nearly a 20% share of the global NGL export market [2][9]. - The expansion of NGL export capabilities allows Energy Transfer to capture higher-margin international volumes, which are generally more profitable than domestic sales [3][9]. Group 2: Financial Stability and Growth - The company benefits from long-term, fee-based contracts with global customers, providing stable cash flows amid volatile commodity price cycles [3]. - Energy Transfer's integrated pipeline and storage network enhances supply-chain connectivity, allowing for increased throughput without a proportional rise in fixed costs, thereby improving margins [4]. Group 3: Industry Context and Competitors - Other Master Limited Partnerships (MLPs) like Enterprise Products Partners LP and Plains All American Pipeline LP are also capitalizing on rising NGL demand, with Enterprise aiming to export over 100 million barrels per month by 2027 [6][7]. - The overall demand for NGL is increasing globally, supported by regulatory tailwinds favoring energy exports, positioning Energy Transfer for sustainable cash flow growth and robust returns to unitholders [5]. Group 4: Earnings and Valuation - The Zacks Consensus Estimate indicates an increase in Energy Transfer's earnings per unit for 2025 and 2026 by 2.13% and 4.26%, respectively, over the past 60 days [8]. - Energy Transfer units are currently trading at a discount relative to the industry, with a trailing 12-month EV/EBITDA of 10.24X compared to the industry average of 11.48X, suggesting undervaluation [10]. Group 5: Price Performance - Energy Transfer units have appreciated by 13.8% over the past year, outperforming the Zacks Oil and Gas - Production Pipeline - MLB industry's growth of 9.2% [12].