ET
ETEnergy Transfer LP is one of the largest and most diversified midstream energy partners in North America, operating in the natural gas transmission sector.
The company is defined by its vast pipeline network, which serves as a critical energy infrastructure backbone, providing stable fee-based revenues.
Updated: January 14, 2026, 16:00 EST
Investment Opinion: Should I buy ET Today?
Based on a comprehensive review, ET presents a compelling but nuanced investment case.
Technical Analysis & Fundamentals: The stock exhibits positive near-term momentum and trades at a reasonable point within its 52-week range, suggesting room for further recovery. Fundamentally, recent quarters show impressive improvements in revenue and, more importantly, profitability. However, this is tempered by low operational efficiency (reflected in a weak ROE) and a high debt load, which elevates financial risk.
Valuation & Risk: ET appears undervalued based on traditional metrics like its low P/E and P/B ratios. The primary concern is the negative earnings growth rate (PEG ratio), which conflicts with the optimistic forward P/E. While its lower beta offers some defensive characteristics, the significant maximum drawdown reminds investors of its potential for sharp declines.
Recommendation: ET is a cautious BUY for value-oriented investors comfortable with the energy sector's inherent risks. The improving profitability and attractive absolute valuation are positive, but these are counterbalanced by weak efficiency metrics and negative earnings growth. This stock is best suited for a portfolio as a tactical, value-driven holding rather than a core growth position. This analysis is for informational purposes only and is not investment advice.
ET 12-Month Price Forecast
RockFlow Model Forecast: Three Scenarios for 2026
Based on a comprehensive analysis, here is the 12-month outlook for Energy Transfer (ET):
12-Month Outlook for ET
The outlook for ET is cautiously positive, driven by its attractive valuation and improving profitability, though significant financial risks remain. Key catalysts include the continued stable performance of its vast pipeline network and potential benefits from growing natural gas demand, which should support its generous distribution yield. The primary risks are its high debt load, which constrains financial flexibility, and the potential for volatility in energy commodity prices. Given the lack of a consensus analyst target, a reasonable 12-month price target range based on its current valuation and sector peers is $19 - $22, implying moderate upside from the current price of $17.40.
Wall Street Consensus
Most Wall Street analysts are optimistic about ET's 12-month outlook, with consensus target around $17.50, indicating expected upside potential.
Bulls vs Bears: ET Investment Factors
Overall, ET has investment potential but also faces challenges. Here are key factors to weigh before investing.
Bullish
- Strong Pipeline Network Growth: 140,000 miles of pipelines position company for continued expansion and fee-based revenue growth.
- Increased Quarterly Distribution: Raised dividend to $0.3325 quarterly ($1.33 annualized) demonstrating commitment to unitholder returns.
- Outperforming Industry Peers: Stock has shown strong 6-month gains compared to natural gas transmission industry averages.
- Steady Cash Flow Generation: Consistent fee-based revenues provide predictable cash flows supporting distribution payments.
Bearish
- Below Average ROE Performance: Return on equity lags behind industry peers despite recent stock outperformance.
- Limited Natural Gas Exposure: Only 7% revenue from natural gas limits exposure to growing electricity demand.
- Technical Weakness Signals: Stock recently slipped below 50-day SMA indicating potential short-term weakness.
- Market Underperformance Trend: Recent trading sessions show ET underperforming broader market indices.
ET Technical Analysis
Of course. Here is the technical analysis of ET's price performance.
Overall Assessment: ET has demonstrated positive momentum, modestly outperforming the market over the recent quarter while exhibiting lower volatility, indicating steady but measured gains.
Short-term Performance: The stock shows strong near-term strength with a 6.03% gain over one month, solidifying its positive 3-month return of 4.69%. This performance is constructive as it signifies an acceleration in upward momentum and, with a relative strength of 1.32% against the market, confirms the stock is in a phase of outperformance.
Current Position: Trading at $17.40, ET sits approximately 19% above its 52-week low but significantly below (about 19% from) its 52-week high, placing it in the lower-middle portion of its annual range. Given this position and the substantial 52-week high-to-low span, the stock does not appear overbought and may have room for further recovery, especially considering its low beta suggests less aggressive price swings.
| Period | ET Return | S&P 500 |
|---|---|---|
| 1m | +5.7% | +1.3% |
| 3m | +7.4% | +5.7% |
| 6m | -0.8% | +10.6% |
| 1y | -12.7% | +16.5% |
| ytd | +5.5% | +1.1% |
ET Fundamental Analysis
Of course. Here is a professional analysis of ET's fundamentals based on the provided data.
1. Revenue & Profitability
ET demonstrated robust revenue growth from Q2 to Q3 2025, increasing from $19.24B to $19.95B. More significantly, profitability improved markedly, with the gross profit margin nearly doubling from 13.95% to 27.02%, indicating much stronger control over the cost of revenue. This flowed through to the bottom line, with a net income margin of 5.11%, showcasing an efficient conversion of sales into profit.
2. Financial Health
The company's financial health shows a mixed picture. The debt-to-equity ratio of 1.84 indicates a significant reliance on debt financing, which is common in capital-intensive industries but elevates financial risk. This is partially mitigated by an acceptable interest coverage ratio of 2.42, meaning operating income is sufficient to cover interest expenses. The current ratio of 1.41 reflects adequate short-term liquidity to meet its obligations.
3. Operational Efficiency
Operational efficiency appears to be a challenge. The return on equity (ROE) is very low at 2.94%, suggesting the company is not generating strong returns for shareholders from its equity base. This is corroborated by a low asset turnover ratio of 0.15, indicating that ET is not efficiently using its assets to generate sales. The 65-day operating cycle points to a lengthy process for converting inventory and other resources into cash.
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Level
ET's valuation metrics present a mixed picture. The trailing P/E of 9.97 is low and substantially cheaper than the forward P/E of 15.32, suggesting rising earnings expectations but still indicating an inexpensive stock on an absolute basis. The low Price-to-Sales (PS) ratio of 0.73 and Price-to-Book (PB) ratio of 1.3 further support an undervalued status from an asset and sales perspective. However, the negative PEG ratio of -0.98 signals that earnings growth is negative, which is a significant concern, and the elevated EV/EBITDA of 33.12 points to high leverage or weak operational cash flows relative to the enterprise value, creating a valuation dichotomy.
Peer Comparison
A direct peer comparison cannot be performed as specific industry average data was not provided. In the absence of this benchmark, the assessment relies solely on the absolute values of the ratios. The low absolute PS and PB ratios generally suggest the stock is trading at a discount, but the negative earnings growth and high EV/EBITDA are strong counter-indicators that would need to be weighed against industry norms for a complete picture.
Investment Risk Disclosure
Volatility Risk
ET demonstrates lower volatility risk compared to the broader market, as indicated by its Beta of 0.663. This suggests the stock is approximately 34% less volatile than the market average. However, the stock experienced a significant Maximum Drawdown of -25.76% over the past year, highlighting potential for substantial price declines during market downturns despite its lower beta.
Other Risks
The absence of notable short interest reduces the immediate risk of a short squeeze, but this does not eliminate fundamental risks. Investors should monitor factors such as liquidity, exposure to energy sector volatility, and interest rate sensitivity, which could impact performance irrespective of speculative trading activity. Ongoing evaluation of these underlying risks remains essential for a comprehensive risk assessment.
FAQs
Opinion: Neutral to slightly bullish for income-focused investors.
Core Reasons: The stock offers an attractive ~7.6% dividend yield supported by predictable cash flows from its vast pipeline network, and its valuation (low P/E, P/S) appears inexpensive. However, these are tempered by weak operational efficiency (low ROE), high debt, and negative earnings growth, limiting capital appreciation potential.
Suitable Investor Types: Primarily suitable for income-seeking, long-term investors who can tolerate the risks associated with a capital-intensive, high-debt midstream energy company. It is less ideal for growth-oriented investors.
Based on the data provided, ET appears to be undervalued based on classic valuation multiples, but this is heavily tempered by its weak fundamentals. Key metrics like the low P/E of 9.97 and P/S of 0.73 suggest a discount compared to typical market valuations. However, the negative PEG ratio of -0.98 reveals the core issue: the stock is cheap because its earnings growth is negative. This undervaluation is further justified by poor operational efficiency, evidenced by a low ROE of 2.94%, and significant financial risk from a high debt load. The low price likely reflects these substantial fundamental weaknesses rather than a true bargain opportunity.
Of course. Based on a professional analysis of the provided data, here are the key risks of holding ET stock, ordered by importance:
1. Financial Risk: The company's high reliance on debt financing, indicated by a debt-to-equity ratio of 1.84, creates significant risk if interest rates rise or cash flows decline, potentially straining its ability to service debt despite a currently adequate interest coverage ratio. 2. Business/Operational Risk: Inefficient use of capital and assets, evidenced by a very low Return on Equity (ROE) of 2.94% and a low asset turnover ratio of 0.15, indicates fundamental operational challenges in generating strong returns from its investments. 3. Market/Price Risk: Despite a lower beta, the stock experienced a significant maximum drawdown of -25.76% over the past year, highlighting its vulnerability to substantial price declines during market downturns or sector-specific headwinds. 4. Industry Risk: As an energy sector entity, the company is inherently exposed to volatility in commodity prices, regulatory changes, and shifts in energy policy, which can directly impact revenue and profitability.
Of course. Based on a professional assessment of Energy Transfer LP (ET), here is the forecast through 2026.
Energy Transfer (ET) Stock Forecast for 2026
1. Target Price Range: For 2026, the base case target is $24 - $28, with a bull case target of $30 - $34, contingent on successful execution of growth projects and favorable energy market conditions.
2. Key Growth Drivers: * Growing Natural Gas Demand: Increased demand for US liquefied natural gas (LNG) exports and domestic power generation will be a primary catalyst, utilizing ET's vast pipeline network. * Strategic Project Execution: The completion and ramp-up of high-return projects, such as the Gulf Run Pipeline and other expansions, will provide direct revenue growth. * Financial Discipline: continued focus on debt reduction and strengthening the balance sheet should lower interest expenses and improve investor confidence, potentially leading to multiple expansion.
3. Main Assumptions: * Stable-to-increasing volumes across its core asset base. * No major regulatory setbacks for new energy infrastructure projects. * Management maintains its current distribution policy while progressing on debt reduction targets.
4. Uncertainty: This forecast is subject to significant uncertainty stemming from volatility in energy commodity prices, potential delays in project approvals or execution, and macroeconomic factors influencing interest rates and industrial demand. The high debt load remains a key risk factor.