Core Viewpoint - Energy Transfer LP (ET) is anticipated to show improvements in both revenue and earnings for the first quarter of 2025, with a revenue estimate of $23.37 billion, reflecting an 8.07% increase year-over-year, and earnings estimated at 33 cents per unit, indicating a 3.13% increase from the previous year [1][2]. Earnings Estimates - The Zacks Consensus Estimate for ET's first-quarter earnings is 33 cents per unit, with a year-over-year growth estimate of 3.13% [2]. - For the current quarter (March 2025), the consensus estimate is 0.33, while the next quarter (June 2025) is estimated at 0.30. The current year (December 2025) is projected at 1.40, and the next year (December 2026) at 1.41 [3]. Surprise History - Energy Transfer has missed the Zacks Consensus Estimate for earnings in three of the last four quarters, resulting in an average negative surprise of 8.33% [4][5]. Earnings Prediction - The model predicts a likely earnings beat for Energy Transfer, supported by a positive Earnings ESP of +1.54% and a Zacks Rank of 3 (Hold) [6][8]. Factors Influencing Q1 Earnings - The company is expanding its clean power generation capacity, having brought online the first of eight planned 10-megawatt natural gas-fired power plants, which is expected to positively impact earnings [8]. - ET is increasing its liquid transportation and processing capacity, completing significant expansions in the Permian Basin and constructing a new crude oil pipeline, which is likely to enhance first-quarter earnings [9]. - Strong export volumes of liquefied petroleum gas to over 55 countries, with a capacity to export nearly 1.1 million barrels per day, are expected to contribute positively to performance [10]. - Fee-based contracts are projected to generate nearly 90% of the company's earnings, ensuring a consistent revenue stream [11]. Valuation Metrics - Energy Transfer units are trading at a trailing 12-month EV/EBITDA of 10.14X, below the industry average of 11.45X, indicating relative undervaluation [12]. Stock Performance - ET's units have gained 3.4% in the past month, outperforming the Zacks Oil and Gas Production Pipeline – MLB industry's rally of 3.2% [15]. Investment Thesis - Energy Transfer operates a vast network of over 130,000 miles of pipelines across 44 states, positioning the company to benefit from rising U.S. production of oil and gas [18]. - Continued investment in expanding pipeline and processing capacity is expected to reinforce its leadership in the midstream industry, supported by strong LNG export capabilities and growing domestic demand [19][20].

Core Viewpoint - Energy Transfer LP (ET) units are currently undervalued compared to the Zacks Oil and Gas Production Pipeline – MLB industry, with an EV/EBITDA ratio of 10.25X, below the industry average of 11.67X, indicating a discount relative to peers [1][2]. Company Overview - Energy Transfer operates an extensive pipeline network exceeding 130,000 miles across 44 states in the U.S. and is actively pursuing growth opportunities to meet increasing power demands [8]. - The company has consistently executed one major accretive acquisition annually since 2021, enhancing its infrastructure, particularly in the Permian Basin [8]. Revenue Generation - Nearly 90% of Energy Transfer's revenues come from fee-based contracts related to transportation and storage services, ensuring stable cash flows and reducing exposure to commodity price fluctuations [9]. - The company has significant export capabilities, with natural gas liquids (NGL) and crude oil export capacities exceeding 1.1 million and 1.9 million barrels per day, respectively [10]. Financial Performance - Energy Transfer's current quarterly cash distribution rate is 32.75 cents per common unit, with management raising distribution rates 14 times in the past five years, resulting in a payout ratio of 101% [12]. - The Zacks Consensus Estimate indicates year-over-year earnings growth of 9.38% for 2025 and 0.39% for 2026 [15]. Management and Insider Ownership - Management and insiders own nearly 10% of Energy Transfer units, with significant purchases totaling over 44 million units worth $468 million from January 2021 to February 2025, indicating confidence in the company's future [13][14]. Market Position - Energy Transfer's asset base is strategically distributed across key U.S. production basins, providing strong earnings support through a diversified portfolio of oil and gas pipelines, gathering and processing facilities, and storage assets [11]. - The company is well-positioned to benefit from the rising production of oil, natural gas, and natural gas liquids in the U.S. [18].