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Energy Transfer Set to Post Q1 Earnings: Buy, Sell or Hold the Stock?
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Energy Transfer LP (ET - Free Report) is expected to report an improvement in its top and bottom line when it reports first-quarter 2025 results on May 6, after market close. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The Zacks Consensus Estimate for ET’s first-quarter revenues is pegged at $23.37 billion, indicating an 8.07% increase from the year-ago reported figure.
The consensus estimate for earnings is pegged at 33 cents per unit. The Zacks Consensus Estimate for ET’s first-quarter earnings indicates a 3.13% increase from the year-ago reported figure.
Image Source: Zacks Investment Research
ET’s Surprise History
Energy Transfer missed the Zacks Consensus Estimate for earnings in three of the trailing four quarters while surpassing in one quarter only, resulting in an average negative surprise of 8.33%.
Image Source: Zacks Investment Research
What the Zacks Model Unveils
Our model predicts a likely earnings beat for Energy Transfer this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is the case here, as you can see below.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: Energy Transfer has an Earnings ESP of +1.54%.
Zacks Rank: Energy Transfer currently carries a Zacks Rank #3.
Another company, Veren Inc. (VRN - Free Report) , operating in the same sector, has the correct combination of both factors for an earnings surprise this season. VRN has an Earnings ESP of +13.79% and a Zacks Rank of 2.
Factors Likely to Have Shaped ET’s Q1 Earnings
Energy Transfer is expanding its clean power generation capacity as per plan and in February 2025, brought the first of eight planned 10-megawatt natural gas-fired power plants online, which is likely to have a positive impact on the to-be-reported quarter earnings.
Energy Transfer is also increasing its liquid transportation and processing capacity. During the second half of 2024, the firm completed 50 million cubic feet per day (MMcf/d) expansions to Orla East and Grey Wolf processing plants in the Permian Basin. In the fourth quarter, the firm completed construction of a 30-mile crude oil pipeline that allows for the transportation of nearly 100,000 barrels per day (Bbls/d) of crude oil from terminals in Midland, TX, to Cushing, OK. Expanding capacity in the high oil and gas production region is likely to have a positive impact on first-quarter earnings.
The quarter’s earnings are also expected to have gained from the strong export volumes of liquefied petroleum gas to different countries across the globe. ET’s export terminals have unique customer offerings with unmatched flexibility and ship loading capabilities, and successfully exports LNG to more than 55 countries across the globe. The firm’s capacity to export nearly 1.1 million barrels per day is likely to have boosted its performance.
Fee-based contracts are expected to have generated nearly 90% of the company’s earnings, and the same is expected to be repeated in the to-be-reported quarter. The predominantly fee-based contracts of the firm ensure a consistent and probable stream of revenue and are expected to have boosted performance in the first quarter.
ET Stock Trading a Discount
Energy Transfer units are somewhat inexpensive on a relative basis, with its current trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA TTM) being 10.14X compared with the industry average of 11.45X.
Image Source: Zacks Investment Research
Other operators in the space, like Plains All American Pipeline, L.P. (PAA - Free Report) and Enterprise Products Partners L.P. (EPD - Free Report) , are currently trading at a discount compared with the industry. EV/EBITDA TTM multiple of PAA and EPD are currently pegged at 8.77X and 9.97X, respectively.
ET Stock’s Price Performance
ET’s units have gained 3.4% in the past month compared with the Zacks Oil and Gas Production Pipeline – MLB industry’s rally of 3.2%.
Image Source: Zacks Investment Research
In the same time frame, units of PAA and EPD have gained 0.9% and 2.2% respectively.
Investment Thesis
Energy Transfer operates a vast network of more than 130,000 miles of pipelines and related infrastructure across 44 states, positioning the company to benefit from rising U.S. production of oil, natural gas and natural gas liquids.
The firm’s continued investment in expanding its pipeline and processing capacity is expected to reinforce its leadership in the midstream industry. Strong LNG export capabilities, along with growing domestic demand, are likely to support sustained performance improvements.
Energy Transfer relies on several key producers for its natural gas supply. The loss of any of these producers could negatively affect the company’s financial performance unless it can secure equivalent supply from alternative sources.
Wrapping Up
Energy Transfer continues to gain from rising demand and making proper utilization of its widespread assets across the United States. The strategic acquisitions continue to supplement organic assets and boost the performance of the company.
The long-term outlook of the firm is promising given its well-spread assets in the United States and focus on expanding operations through organic or inorganic methods.
Those who already own this Zacks Rank #3 stock would do well to retain it in their portfolio.
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Energy Transfer Set to Post Q1 Earnings: Buy, Sell or Hold the Stock?
Energy Transfer LP (ET - Free Report) is expected to report an improvement in its top and bottom line when it reports first-quarter 2025 results on May 6, after market close. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
The Zacks Consensus Estimate for ET’s first-quarter revenues is pegged at $23.37 billion, indicating an 8.07% increase from the year-ago reported figure.
The consensus estimate for earnings is pegged at 33 cents per unit. The Zacks Consensus Estimate for ET’s first-quarter earnings indicates a 3.13% increase from the year-ago reported figure.
Image Source: Zacks Investment Research
ET’s Surprise History
Energy Transfer missed the Zacks Consensus Estimate for earnings in three of the trailing four quarters while surpassing in one quarter only, resulting in an average negative surprise of 8.33%.
Image Source: Zacks Investment Research
What the Zacks Model Unveils
Our model predicts a likely earnings beat for Energy Transfer this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is the case here, as you can see below.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: Energy Transfer has an Earnings ESP of +1.54%.
Zacks Rank: Energy Transfer currently carries a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Another company, Veren Inc. (VRN - Free Report) , operating in the same sector, has the correct combination of both factors for an earnings surprise this season. VRN has an Earnings ESP of +13.79% and a Zacks Rank of 2.
Factors Likely to Have Shaped ET’s Q1 Earnings
Energy Transfer is expanding its clean power generation capacity as per plan and in February 2025, brought the first of eight planned 10-megawatt natural gas-fired power plants online, which is likely to have a positive impact on the to-be-reported quarter earnings.
Energy Transfer is also increasing its liquid transportation and processing capacity. During the second half of 2024, the firm completed 50 million cubic feet per day (MMcf/d) expansions to Orla East and Grey Wolf processing plants in the Permian Basin. In the fourth quarter, the firm completed construction of a 30-mile crude oil pipeline that allows for the transportation of nearly 100,000 barrels per day (Bbls/d) of crude oil from terminals in Midland, TX, to Cushing, OK. Expanding capacity in the high oil and gas production region is likely to have a positive impact on first-quarter earnings.
The quarter’s earnings are also expected to have gained from the strong export volumes of liquefied petroleum gas to different countries across the globe. ET’s export terminals have unique customer offerings with unmatched flexibility and ship loading capabilities, and successfully exports LNG to more than 55 countries across the globe. The firm’s capacity to export nearly 1.1 million barrels per day is likely to have boosted its performance.
Fee-based contracts are expected to have generated nearly 90% of the company’s earnings, and the same is expected to be repeated in the to-be-reported quarter. The predominantly fee-based contracts of the firm ensure a consistent and probable stream of revenue and are expected to have boosted performance in the first quarter.
ET Stock Trading a Discount
Energy Transfer units are somewhat inexpensive on a relative basis, with its current trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA TTM) being 10.14X compared with the industry average of 11.45X.
Image Source: Zacks Investment Research
Other operators in the space, like Plains All American Pipeline, L.P. (PAA - Free Report) and Enterprise Products Partners L.P. (EPD - Free Report) , are currently trading at a discount compared with the industry. EV/EBITDA TTM multiple of PAA and EPD are currently pegged at 8.77X and 9.97X, respectively.
ET Stock’s Price Performance
ET’s units have gained 3.4% in the past month compared with the Zacks Oil and Gas Production Pipeline – MLB industry’s rally of 3.2%.
Image Source: Zacks Investment Research
In the same time frame, units of PAA and EPD have gained 0.9% and 2.2% respectively.
Investment Thesis
Energy Transfer operates a vast network of more than 130,000 miles of pipelines and related infrastructure across 44 states, positioning the company to benefit from rising U.S. production of oil, natural gas and natural gas liquids.
The firm’s continued investment in expanding its pipeline and processing capacity is expected to reinforce its leadership in the midstream industry. Strong LNG export capabilities, along with growing domestic demand, are likely to support sustained performance improvements.
Energy Transfer relies on several key producers for its natural gas supply. The loss of any of these producers could negatively affect the company’s financial performance unless it can secure equivalent supply from alternative sources.
Wrapping Up
Energy Transfer continues to gain from rising demand and making proper utilization of its widespread assets across the United States. The strategic acquisitions continue to supplement organic assets and boost the performance of the company.
The long-term outlook of the firm is promising given its well-spread assets in the United States and focus on expanding operations through organic or inorganic methods.
Those who already own this Zacks Rank #3 stock would do well to retain it in their portfolio.