Key Points Energy Transfer expects its earnings growth rate will accelerate in 2026. The MLP plans to increase its capital spending this year. It should have plenty of fuel to continue increasing its high-yielding distribution by 3% to 5% each year. 10 stocks we like better than Energy Transfer › Energy Transfer (NYSE: ET) is coming off a down year. The master limited partnership's (MLP) growth rate slowed considerably in 2025 due to more challenging market conditions and fewer growth catalysts. T ...

Core Viewpoint - Energy Transfer is currently undervalued in the market, trading at a low valuation compared to its peers, despite having a strong financial position and potential growth catalysts ahead [1][7][6]. Valuation and Financial Performance - Energy Transfer's units have declined by over 10% this year, leading to a valuation of less than 9 times earnings, which is significantly lower than the peer average of around 12 times [1][4]. - The company expects earnings growth to be less than 4% this year, a slowdown from the 10% compound annual growth rate since 2020, primarily due to weaker commodity prices and fewer growth catalysts [3][8]. Financial Strength - Energy Transfer is in its strongest financial position in history, with a leverage ratio in the lower half of its target range of 4.0-4.5, indicating a solid financial profile compared to some peers [6]. Growth Catalysts - The company plans to invest $5 billion into growth capital projects in 2025, including the Nederland Flexport NGL expansion and Hugh Brinson Pipeline, which are expected to add meaningful incremental earnings by the end of 2026 [8]. - Additional expansion projects, such as the $5.3 billion Desert Southeast Expansion, are expected to be completed by the end of 2029, providing growth visibility into 2030 [9]. - Energy Transfer is also developing several projects to increase natural gas transportation capacity, particularly to support growing demand from AI data centers [10]. Acquisition Potential - The company has a history of consolidating the energy midstream sector and has the financial strength to pursue acquisitions, which could further enhance its valuation [11]. Investment Opportunity - Despite the current slowdown in growth, Energy Transfer is viewed as a compelling investment opportunity due to its attractive valuation and the potential for growth from ongoing and future projects [12].

Core Viewpoint - Energy Transfer is currently experiencing a dip in unit price, presenting a potential buying opportunity as the company is expected to recover and grow in the long term [1][2]. Financial Performance - Energy Transfer initially projected adjusted EBITDA between $16.1 billion and $16.5 billion for the year, indicating a growth rate of 3.9% to 6.5% compared to the previous year, which is below its historical double-digit growth rate since 2020 [4]. - The company's growth outlook has worsened due to weaker commodity prices, leading to expectations of adjusted EBITDA at or slightly below the low end of its guidance range [5]. Growth Catalysts - The company plans to invest $5 billion in growth capital projects this year, including significant projects like the Nederland Flexport NGL expansion and the Hugh Brinson Pipeline, which are expected to generate income starting in 2026 [6]. - Energy Transfer has a stake in Sunoco, which is set to acquire Parkland for $9.3 billion, providing a boost to Energy Transfer's earnings once the deal closes [8]. Future Projects - Energy Transfer has approved several new growth capital projects, including the Desert Southwest Expansion project, a $5.3 billion natural gas pipeline expected to enter service by the end of 2029 [9]. - The company is also working on the long-delayed Lake Charles LNG export terminal, which may receive approval this year, along with other natural gas pipeline expansions to meet rising demand [10]. Financial Position - Energy Transfer is in its strongest financial position in history, allowing for continued organic expansion and potential acquisitions as opportunities arise [11]. Investment Opportunity - The current dip in unit price has resulted in a lower valuation and a higher distribution yield of 7.6%, making it an attractive investment for those anticipating a growth reacceleration [12].

Core Viewpoint - Energy Transfer's growth has significantly slowed in 2025, with a decline in unit prices and underperformance compared to the S&P 500, despite a strong previous year [1][2]. Financial Performance - In 2024, Energy Transfer achieved a record $15.5 billion in adjusted EBITDA, a 13% increase from 2023 [4]. - The company generated $8.4 billion in distributable cash flow in 2024, marking a 10% year-over-year increase [5]. - For the first half of 2025, adjusted EBITDA was nearly $8 billion, reflecting a 4% increase, while distributable cash flow was $5.5 billion, showing less than 1% growth [6]. Growth Outlook - Energy Transfer expects adjusted EBITDA for 2025 to be at or slightly below the lower end of its guidance range of $16.1 billion to $16.5 billion, indicating less than 4% growth compared to 2024 [7]. - The company is investing $5 billion in growth capital projects in 2025, with many projects expected to come online by the end of 2026 [8]. - Recent completions include two new gas processing plants, with another scheduled for completion in the second quarter of next year [9]. Expansion Projects - Energy Transfer is finalizing the Nederland Flexport NGL expansion and the Hugh Brinson Pipeline, which are expected to significantly boost earnings and cash flow in 2026 and 2027 [10]. - The Desert Southwest expansion of the Transwestern Pipeline, a $5.3 billion project, is anticipated to be operational by the end of the decade [11]. - The company is also advancing the long-delayed Lake Charles LNG export project and exploring additional projects to supply gas to new power plants and data centers [12]. Financial Position - Energy Transfer is in its strongest financial position to date, allowing for potential acquisitions as opportunities arise [13]. - Although no deals have been made this year, its affiliate Sunoco LP has agreed to acquire Parkland for $9.1 billion, expected to enhance earnings by over 10% in the first year [14]. Investment Opportunity - Despite the slowdown in growth, the recent dip in unit prices may present a buying opportunity, especially for investors willing to accept the Schedule K-1 tax form [15]. - Investors can benefit from a distribution yield of over 7.5%, which is expected to grow as income rises, positioning them for a high total return [16].