Energy Transfer (ET): Assessing the Valuation Opportunity for Long-Term Investors

Energy Transfer (ET) shares continue to see steady interest from income-focused investors, especially with its performance over the past year producing a double-digit total return. The company has been navigating recent market fluctuations with a solid footing.

See our latest analysis for Energy Transfer.

Despite some short-term share price softness, Energy Transfer’s 1-year total shareholder return of over 11% shows that momentum is still with long-term investors. This is especially notable as the company maintains strength through industry shifts and recent volatility.

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With Energy Transfer’s shares trading well below analyst price targets while also boasting strong historical returns, the key question for investors is whether this discount signals untapped value or if the market already anticipates future growth.

Most Popular Narrative: 25% Undervalued

With Energy Transfer recently closing at $16.92, the most widely followed narrative sets a fair value far above that price, suggesting significant upside is possible from here.

The company's NGL export capacity expansions at the Nederland terminal and new pipeline loopings position it to benefit from increased U.S. hydrocarbon exports to international markets, supporting sustained throughput and export revenues as global energy demand rises. Recent long-term, investment-grade customer commitments on multi-billion-dollar projects de-risk cash flows and improve visibility into earnings growth. The buildout of vertically integrated infrastructure, such as Lake Charles LNG tied to ET pipelines, enhances both margins and return on invested capital.

Read the complete narrative.

Curious what’s fueling that premium price target? The framework hinges on a string of aggressive infrastructure buildouts, expectations of sharply higher earnings, and future profit multiples typically reserved for faster-growth sectors. Is a traditional midstream energy company about to rewrite valuation playbooks? Check the full narrative for the quantitative engine behind their bullish scenario.

Result: Fair Value of $22.55 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, setbacks in large project execution or weaker than anticipated energy demand could challenge these growth assumptions and have a negative impact on Energy Transfer’s future performance.

Find out about the key risks to this Energy Transfer narrative.

Build Your Own Energy Transfer Narrative

If the consensus narrative doesn’t fit your outlook or you’d rather dive into the data personally, crafting your own perspective takes less than three minutes, so why not Do it your way

A great starting point for your Energy Transfer research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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