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Will Energy Transfer's Wide Pipeline Network Power Long-Term Growth?
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Key Takeaways
Energy Transfer benefits from a 140,000-mile pipeline network spanning key U.S. energy basins.
Long-term contracts and diversified assets support stable cash flow and global export growth.
ET units are up 10.1% in a year and trade below the industry average on an EV/EBITDA basis.
Energy Transfer LP (ET - Free Report) is strategically positioned to benefit from its vast and diversified midstream infrastructure network, which spans nearly 140,000 miles of pipelines across North America. This integrated system, encompassing natural gas, natural gas liquids (“NGL”), crude oil and refined product transportation, provides a strong competitive advantage. The scale and connectivity of Energy Transfer’s assets allow it to capture volumes across multiple basins, including the Permian, Eagle Ford and Marcellus, while linking them efficiently to key demand centers and export hubs.
Energy Transfer’s geographic and product diversification enhances cash flow stability and reduces exposure to any single commodity or region. The company’s long-term contracts and fee-based earnings insulate the business from short-term commodity price fluctuations. In addition, the extensive infrastructure provides customers with unmatched flexibility and reliability, making Energy Transfer a preferred partner for producers and refiners.
Energy Transfer is well-positioned to capitalize on the continued demand for U.S. energy exports. The company’s Gulf Coast assets, including LNG and NGL export terminals, enable it to serve growing global markets. These strategically located facilities are key to unlocking international pricing and expanding margins. At present, 80 countries and territories benefit from ET’s exports.
With a strong focus on operational efficiency, cost discipline and leveraging its existing infrastructure, Energy Transfer is poised for sustained growth, strong cash flows and steady returns to its shareholders over the long term.
How Midstream Operators Are Benefiting From Rising Demand
Midstream operators are benefiting from rising energy demand, which drives higher volumes through their pipeline, storage and export infrastructure. Long-term contracts and fee-based models ensure stable cash flows, while expanding LNG and NGL exports further enhance profitability and growth opportunities across the sector.
Midstream operators like Kinder Morgan (KMI - Free Report) and ONEOK (OKE - Free Report) are well-positioned to benefit from rising energy demand through their extensive infrastructure. Kinder Morgan operates an 83,000-mile pipeline network, which supports growing U.S. LNG exports. ONEOK leverages its integrated NGL systems in the Permian and Williston basins to handle increasing production volumes, ensuring strong cash flows and long-term growth.
ET’s Earnings Estimates Moving North
The Zacks Consensus Estimate for Energy Transfer’s 2025 and 2026 earnings per unit indicates an increase of 2.86% and 4.26%, respectively, in the past 60 days.
Image Source: Zacks Investment Research
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) TTM is 10.25X compared with the industry average of 11.53X. This indicates that the firm is presently undervalued compared with its industry.
Image: Bigstock
Will Energy Transfer's Wide Pipeline Network Power Long-Term Growth?
Key Takeaways
Energy Transfer LP (ET - Free Report) is strategically positioned to benefit from its vast and diversified midstream infrastructure network, which spans nearly 140,000 miles of pipelines across North America. This integrated system, encompassing natural gas, natural gas liquids (“NGL”), crude oil and refined product transportation, provides a strong competitive advantage. The scale and connectivity of Energy Transfer’s assets allow it to capture volumes across multiple basins, including the Permian, Eagle Ford and Marcellus, while linking them efficiently to key demand centers and export hubs.
Energy Transfer’s geographic and product diversification enhances cash flow stability and reduces exposure to any single commodity or region. The company’s long-term contracts and fee-based earnings insulate the business from short-term commodity price fluctuations. In addition, the extensive infrastructure provides customers with unmatched flexibility and reliability, making Energy Transfer a preferred partner for producers and refiners.
Energy Transfer is well-positioned to capitalize on the continued demand for U.S. energy exports. The company’s Gulf Coast assets, including LNG and NGL export terminals, enable it to serve growing global markets. These strategically located facilities are key to unlocking international pricing and expanding margins. At present, 80 countries and territories benefit from ET’s exports.
With a strong focus on operational efficiency, cost discipline and leveraging its existing infrastructure, Energy Transfer is poised for sustained growth, strong cash flows and steady returns to its shareholders over the long term.
How Midstream Operators Are Benefiting From Rising Demand
Midstream operators are benefiting from rising energy demand, which drives higher volumes through their pipeline, storage and export infrastructure. Long-term contracts and fee-based models ensure stable cash flows, while expanding LNG and NGL exports further enhance profitability and growth opportunities across the sector.
Midstream operators like Kinder Morgan (KMI - Free Report) and ONEOK (OKE - Free Report) are well-positioned to benefit from rising energy demand through their extensive infrastructure. Kinder Morgan operates an 83,000-mile pipeline network, which supports growing U.S. LNG exports. ONEOK leverages its integrated NGL systems in the Permian and Williston basins to handle increasing production volumes, ensuring strong cash flows and long-term growth.
ET’s Earnings Estimates Moving North
The Zacks Consensus Estimate for Energy Transfer’s 2025 and 2026 earnings per unit indicates an increase of 2.86% and 4.26%, respectively, in the past 60 days.
Image Source: Zacks Investment Research
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) TTM is 10.25X compared with the industry average of 11.53X. This indicates that the firm is presently undervalued compared with its industry.
Image Source: Zacks Investment Research
ET’s Price Performance
Units of Energy Transfer have risen 10.1% in the past year compared with the Zacks Oil and Gas - Production Pipeline - MLB industry’s growth of 6.3%.
Image Source: Zacks Investment Research
ET’s Zacks Rank
Energy Transfer currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.