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ET Stock Outperforms its Industry in Nine Months: How to Play?
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Key Takeaways
ET units rose 12.2% in 9 months, beating the industry's 4.8% growth and signaling bullish momentum.
ET benefits from long-term, fee-based contracts and growing demand from utilities and data centers.
New U.S. export rules may disrupt ethane shipments to China, impacting ET's revenues and operations.
Units of Energy Transfer LP (ET - Free Report) have rallied 12.2% in the past nine months compared with the Zacks Oil and Gas - Production Pipeline - MLB industry’s growth of 4.8%. The oil and gas midstream company operates an extensive pipeline network across the United States and is actively exploring opportunities to support rising power demand from emerging load centers along its system.
The company is also a leading exporter of liquefied petroleum gas and is expanding its natural gas liquids (NGL) export infrastructure to meet growing global demand. However, new licensing rules introduced by the U.S. Commerce Department in May 2025 have added uncertainty to existing contracts and future shipment volumes to China.
The ET stock has also outperformed its sector in the past nine months.
Price Performance (Nine Months)
Image Source: Zacks Investment Research
Energy Transfer is trading above its 50-day and 200-day simple moving averages (SMA), signaling a bullish trend.
ET's SMA Chart 50 and 200-day
Image Source: Zacks Investment Research
The 50-day and 200-day SMAs are key indicators for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of a stock’s uptrend or downtrend.
Should you consider adding ET to your portfolio only based on positive price movements? Let’s delve deeper and find out the factors that can help investors decide whether it is a good entry point to add ET stock to their portfolio.
Key Drivers Behind ET Stock’s Performance
Energy Transfer generates nearly 90% of its revenues from fee-based contracts related to its transportation and storage services. These long-term agreements with financially stable and creditworthy customers ensure steady cash flow and greatly minimize the company’s exposure to commodity price fluctuations. As oil and gas production continues to grow across the United States, Energy Transfer is well-positioned to benefit from the rising demand for pipeline infrastructure.
Energy Transfer is proactively pursuing opportunities to address the increasing power demand from new load centers along its pipeline system. The company has secured several agreements with electric utilities in the Midwest to provide natural gas for upcoming gas-fired power plants that will replace aging coal-fired facilities. Additionally, it has received connection requests from nearly 200 data centers across 14 states, highlighting robust and accelerating demand from the expanding digital infrastructure sector.
Energy Transfer’s assets are strategically positioned in key U.S. production basins and high-demand regions, offering a strong platform for stable earnings. Its diversified portfolio, which includes oil and gas pipelines, gathering and processing infrastructure, and storage facilities, allows the company to effectively serve a broad range of markets with efficiency.
ET operates a vast pipeline network exceeding 130,000 miles across 44 U.S. states. The company continues to expand its reach through a combination of strategic acquisitions and organic growth initiatives.
Energy Transfer has significant export capacity, able to ship over 1.1 million barrels per day of NGLs and 1.9 million barrels per day of crude oil. Ongoing expansions at its Marcus Hook and Nederland terminals are boosting these capabilities. With an estimated 20% share of the global NGL export market, the company plays a major role in international energy trade.
Headwinds for ET Stock
The new licensing requirements introduced by the U.S. Commerce Department in May 2025 have created fresh uncertainty around existing agreements and future shipment volumes to China.
The licensing rule, aimed at addressing national security concerns, could delay or block ethane shipments if export licenses are not granted in a timely manner. Since China accounts for nearly 50% of all the U.S. ethane exports, any disruption would pose a significant risk to Energy Transfer’s operations and revenues, particularly those tied to its Mont Belvieu and Nederland export terminals, which are critical for the NGL and ethane activities.
ET’s Earnings Estimates Moving Up
The Zacks Consensus Estimate for Energy Transfer’s 2025 and 2026 earnings per unit indicates an increase of 2.13% and 4.26%, respectively, in the past 60 days.
Image Source: Zacks Investment Research
However, another firm, ONEOK Inc. (OKE - Free Report) , operating in the same space, is showing a decline in 2025 and 2026 earnings per share by 3.15% and 6.28%, respectively, in the same time period.
ET Shares More With Unitholders
Energy Transfer’s current quarterly cash distribution rate is 32.75 cents per Energy Transfer common unit. Management has raised distribution rates 14 times in the past five years, and the current payout ratio is 98%.
Another firm, Plains All American Pipeline (PAA - Free Report) , operating in the midstream space, has extensive assets in the United States. Plains All American raised distribution rates 14 times in the past five years, and the current payout ratio is 102%.
ET’s Units Are Trading at a Discount
Energy Transfer units are somewhat inexpensive relative to the industry. ET’s current trailing 12-month Enterprise Value/Earnings before Interest, Tax, Depreciation and Amortization (EV/EBITDA) is 10.37X compared with the industry average of 11.85X. This indicates that the firm is presently undervalued compared with its industry.
Image Source: Zacks Investment Research
Plains All American Pipeline is also currently trading at a discount of 9.78X.
ET Stock Returns Lower Than Its Industry
Energy Transfer’s trailing 12-month return on equity (“ROE”) is 11.47%, lower than the industry average of 13.95%. Return on equity, a profitability measure, reflects how effectively a company utilizes its shareholders’ funds to generate income.
Image Source: Zacks Investment Research
ONEOK’s ROE is better than its industry and currently stands at 15.58%
Summing Up
Entergy Transfer, with more than 130,000 miles of pipeline and related infrastructure in 44 states, is poised well to benefit from the improving oil, natural gas and natural gas liquid production volumes in the United States.
Entergy Transfer’s positive movement in earnings estimates and a VGM Score of A indicate a strong performance ahead.
Yet, the firm’s low ROE compared to its industry and new license requirements for export can create a near-term reduction in export volumes. It will be better for the new investors to wait a little longer and find a better entry point for this Zacks Rank #3 (Hold) stock.
Image: Bigstock
ET Stock Outperforms its Industry in Nine Months: How to Play?
Key Takeaways
Units of Energy Transfer LP (ET - Free Report) have rallied 12.2% in the past nine months compared with the Zacks Oil and Gas - Production Pipeline - MLB industry’s growth of 4.8%. The oil and gas midstream company operates an extensive pipeline network across the United States and is actively exploring opportunities to support rising power demand from emerging load centers along its system.
The company is also a leading exporter of liquefied petroleum gas and is expanding its natural gas liquids (NGL) export infrastructure to meet growing global demand. However, new licensing rules introduced by the U.S. Commerce Department in May 2025 have added uncertainty to existing contracts and future shipment volumes to China.
The ET stock has also outperformed its sector in the past nine months.
Price Performance (Nine Months)
Image Source: Zacks Investment Research
Energy Transfer is trading above its 50-day and 200-day simple moving averages (SMA), signaling a bullish trend.
ET's SMA Chart 50 and 200-day
Image Source: Zacks Investment Research
The 50-day and 200-day SMAs are key indicators for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of a stock’s uptrend or downtrend.
Should you consider adding ET to your portfolio only based on positive price movements? Let’s delve deeper and find out the factors that can help investors decide whether it is a good entry point to add ET stock to their portfolio.
Key Drivers Behind ET Stock’s Performance
Energy Transfer generates nearly 90% of its revenues from fee-based contracts related to its transportation and storage services. These long-term agreements with financially stable and creditworthy customers ensure steady cash flow and greatly minimize the company’s exposure to commodity price fluctuations. As oil and gas production continues to grow across the United States, Energy Transfer is well-positioned to benefit from the rising demand for pipeline infrastructure.
Energy Transfer is proactively pursuing opportunities to address the increasing power demand from new load centers along its pipeline system. The company has secured several agreements with electric utilities in the Midwest to provide natural gas for upcoming gas-fired power plants that will replace aging coal-fired facilities. Additionally, it has received connection requests from nearly 200 data centers across 14 states, highlighting robust and accelerating demand from the expanding digital infrastructure sector.
Energy Transfer’s assets are strategically positioned in key U.S. production basins and high-demand regions, offering a strong platform for stable earnings. Its diversified portfolio, which includes oil and gas pipelines, gathering and processing infrastructure, and storage facilities, allows the company to effectively serve a broad range of markets with efficiency.
ET operates a vast pipeline network exceeding 130,000 miles across 44 U.S. states. The company continues to expand its reach through a combination of strategic acquisitions and organic growth initiatives.
Energy Transfer has significant export capacity, able to ship over 1.1 million barrels per day of NGLs and 1.9 million barrels per day of crude oil. Ongoing expansions at its Marcus Hook and Nederland terminals are boosting these capabilities. With an estimated 20% share of the global NGL export market, the company plays a major role in international energy trade.
Headwinds for ET Stock
The new licensing requirements introduced by the U.S. Commerce Department in May 2025 have created fresh uncertainty around existing agreements and future shipment volumes to China.
The licensing rule, aimed at addressing national security concerns, could delay or block ethane shipments if export licenses are not granted in a timely manner. Since China accounts for nearly 50% of all the U.S. ethane exports, any disruption would pose a significant risk to Energy Transfer’s operations and revenues, particularly those tied to its Mont Belvieu and Nederland export terminals, which are critical for the NGL and ethane activities.
ET’s Earnings Estimates Moving Up
The Zacks Consensus Estimate for Energy Transfer’s 2025 and 2026 earnings per unit indicates an increase of 2.13% and 4.26%, respectively, in the past 60 days.
Image Source: Zacks Investment Research
However, another firm, ONEOK Inc. (OKE - Free Report) , operating in the same space, is showing a decline in 2025 and 2026 earnings per share by 3.15% and 6.28%, respectively, in the same time period.
ET Shares More With Unitholders
Energy Transfer’s current quarterly cash distribution rate is 32.75 cents per Energy Transfer common unit. Management has raised distribution rates 14 times in the past five years, and the current payout ratio is 98%.
Another firm, Plains All American Pipeline (PAA - Free Report) , operating in the midstream space, has extensive assets in the United States. Plains All American raised distribution rates 14 times in the past five years, and the current payout ratio is 102%.
ET’s Units Are Trading at a Discount
Energy Transfer units are somewhat inexpensive relative to the industry. ET’s current trailing 12-month Enterprise Value/Earnings before Interest, Tax, Depreciation and Amortization (EV/EBITDA) is 10.37X compared with the industry average of 11.85X. This indicates that the firm is presently undervalued compared with its industry.
Image Source: Zacks Investment Research
Plains All American Pipeline is also currently trading at a discount of 9.78X.
ET Stock Returns Lower Than Its Industry
Energy Transfer’s trailing 12-month return on equity (“ROE”) is 11.47%, lower than the industry average of 13.95%. Return on equity, a profitability measure, reflects how effectively a company utilizes its shareholders’ funds to generate income.
Image Source: Zacks Investment Research
ONEOK’s ROE is better than its industry and currently stands at 15.58%
Summing Up
Entergy Transfer, with more than 130,000 miles of pipeline and related infrastructure in 44 states, is poised well to benefit from the improving oil, natural gas and natural gas liquid production volumes in the United States.
Entergy Transfer’s positive movement in earnings estimates and a VGM Score of A indicate a strong performance ahead.
Yet, the firm’s low ROE compared to its industry and new license requirements for export can create a near-term reduction in export volumes. It will be better for the new investors to wait a little longer and find a better entry point for this Zacks Rank #3 (Hold) stock.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.