Energy Transfer LP

Based on the provided analysis, here is a comprehensive evaluation of whether ET is worth buying.

Technical Analysis ET exhibits strong bullish momentum with impressive recent gains, significantly outperforming the market. Its exceptionally low beta suggests these gains have been achieved with unusual stability. Trading near the upper end of its 52-week range, the stock does not currently appear overbought, supported by its steady, low-volatility ascent.

Fundamentals & Valuation Fundamentally, ET shows encouraging sequential revenue growth and improved profitability, though its operational efficiency metrics indicate room for improvement. The valuation presents a mixed picture: traditional P/E and a very low PEG ratio suggest significant undervaluation relative to earnings growth, but the high EV/EBITDA ratio signals a much richer valuation when debt is considered. The lack of peer data makes a relative valuation assessment difficult.

Risk Assessment From a risk perspective, ET's ultra-low beta is a major positive, indicating very low correlation to market swings. However, investors must acknowledge its substantial maximum drawdown over the past year. The minimal short interest is a stabilizing factor, but sector-specific risks, such as energy commodity price fluctuations, remain ever-present.

Buy Recommendation

BUY

ET presents a compelling case for investors seeking a low-volatility stock with strong momentum and apparent undervaluation based on its growth prospects (PEG ratio). The improving revenue and profitability, combined with a manageable debt load, support a positive outlook. While the high EV/EBITDA ratio warrants caution and operational efficiency needs monitoring, the technical strength and attractive growth-adjusted valuation tilt the balance in favor of a buy recommendation for risk-adjusted returns.

*Note: This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis provided, here is a 12-month outlook for Energy Transfer LP (ET):

Catalysts: The primary positive catalysts are the continuation of its strong bullish momentum, fueled by improving revenue and profitability. Significant undervaluation based on its earnings growth (low PEG ratio) could attract investors seeking value, while its exceptionally low beta offers a defensive appeal in a potentially volatile market.

Risks: Key risks include the stock's high enterprise valuation (EV/EBITDA) when accounting for its debt, which could limit upward re-rating. Sector-specific headwinds, such as volatility in energy commodity prices, and the stock's history of a substantial maximum drawdown remain important concerns to monitor.

Outlook & Target: Given the strong technical picture and favorable growth-adjusted valuation, the outlook is positive. While no specific analyst target is provided, a reasonable 12-month target range could be $22 - $25, representing a 16-32% upside from the current price of $18.93, contingent on stable energy markets and continued execution.

Wall Street Consensus

Most Wall Street analysts are optimistic about Energy Transfer LP's 12-month outlook, with consensus target around $18.90, indicating expected upside potential.

Overall, ET has investment potential but also faces challenges. Here are key factors to weigh before investing.

ET has demonstrated strong bullish momentum, significantly outperforming the broader market with substantial gains over recent months.

The stock has delivered impressive short-term returns, rising 9.14% over one month and 14.2% over three months while outperforming the market by nearly 14 percentage points, supported by its exceptionally low beta suggesting stable, consistent upward movement. Currently trading at $18.93, ET sits approximately 77% above its 52-week low of $14.60 but remains about 8% below its 52-week high of $20.509, positioning it in the upper range without appearing overbought given its steady advance and low volatility characteristics.

Revenue & Profitability ET demonstrated sequential revenue growth from $19.95 billion in Q3 to $22.41 billion in Q4 2025, indicating positive top-line momentum. Profitability improved with net income rising to $1.46 billion (net margin of 6.5%), up from $1.02 billion in the prior quarter. The operating profit margin held steady near 10.6%, reflecting stable core operations despite a slight decline in gross margin.

Financial Health The company maintains a moderate debt level with a debt-to-equity ratio of 1.42 and a debt ratio of 0.49, indicating balanced leverage. Interest coverage of 3.1x suggests adequate capacity to service debt obligations, although the absence of cash ratio and cash flow metrics in the data limits a full liquidity assessment. Overall, the capital structure appears manageable but warrants monitoring.

Operational Efficiency ET’s return on equity was modest at 2.98%, while asset turnover stood at 0.16, reflecting relatively low efficiency in generating sales from its asset base. The fixed asset turnover of 0.22 further underscores challenges in utilizing long-term assets productively. These metrics indicate room for improvement in operational effectiveness and capital allocation.

Based on the PE ratios of approximately 10.8 (TTM) and 10.3 (Forward), the stock appears to be undervalued. This assessment is strongly supported by the exceptionally low PEG ratio of 0.21, which indicates the market is pricing the stock at a significant discount to its expected earnings growth rate. However, the high EV/EBITDA ratio of 37.2 suggests that when accounting for debt, the valuation is much richer, presenting a mixed picture overall.

A direct peer comparison is not possible due to the unavailability of industry average data. Without these benchmarks, it is challenging to contextualize the stock's valuation multiples against its sector competitors. Therefore, the assessment of whether it is relatively overvalued or undervalued within its industry cannot be conclusively determined.

Volatility Risk: ET demonstrates exceptionally low volatility risk relative to the market, as evidenced by its remarkably low Beta of approximately 0.07. However, investors should be aware that the stock has still experienced a significant price decline, with a maximum drawdown of -22.91% over the past year.

Other Risks: The absence of reported short interest suggests minimal speculative pressure against the stock from bearish investors. This lack of short interest could be interpreted as a stabilizing factor, though it does not eliminate risks related to broader market sentiment or commodity price fluctuations inherent to the energy sector.