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Energy Transfer (ET): Evaluating Undervaluation After Recent Underperformance vs Long-Term Return Strength

Simply Wall St · 4d ago

Energy Transfer (ET) has quietly lagged the market over the past year, even as its underlying cash flows and earnings have grown. This combination may create an interesting entry point for long term income focused investors.

See our latest analysis for Energy Transfer.

Despite a softer year, with a 1 year total shareholder return of minus 9.05 percent, Energy Transfer still shows its resilience. The 3 year total shareholder return sits at a hefty 75.28 percent, suggesting long term momentum remains intact even if near term enthusiasm has cooled.

If Energy Transfer has you thinking about income and durability, it might be worth exploring fast growing stocks with high insider ownership as another way to uncover compelling ideas with aligned insiders.

With earnings still growing, units trading at a discount to analyst targets, and an intrinsic value gap implied by cash flows, investors face a key question: is Energy Transfer undervalued today, or is the market already pricing in its future growth?

Most Popular Narrative Narrative: 23.0% Undervalued

With Energy Transfer last closing at $16.59 against a narrative fair value of about $21.55, the story positions current pricing as a discount worth investigating.

Analysts expect earnings to reach $6.7 billion (and earnings per share of $1.92) by about September 2028, up from $4.5 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $7.6 billion in earnings, and the most bearish expecting $4.1 billion.

Read the complete narrative.

Want to see what kind of revenue runway and margin lift could justify that future earnings jump and higher multiple, all under a 7 to 8 percent discount rate? The full narrative breaks down the growth path, the profitability shift, and the valuation math that turns today’s price into tomorrow’s potential upside.

Result: Fair Value of $21.55 (UNDERVALUED)

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

However, softer Bakken and Permian volumes, along with potential delays or cost overruns on major projects, could quickly challenge today’s upbeat growth and valuation assumptions.

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

Build Your Own Energy Transfer Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a custom view in just minutes: Do it your way.

A great starting point for your Energy Transfer research is our analysis highlighting 4 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.