Energy Transfer’s Upbeat Financial Performance and Strategic Capex Fuel Buy Rating

Analyst Gabe Moreen of Mizuho Securities maintained a Buy rating on Energy Transfer (ET – Research Report), retaining the price target of $19.00.

Gabe Moreen has given his Buy rating due to a combination of factors that indicate Energy Transfer’s strong financial performance and positive outlook. Energy Transfer reported first-quarter results that were better than anticipated, with notable optimization gains in the ‘Intrastate’ segment, contributing to an upward revision of their full-year adjusted EBITDA guidance. Despite a cautious approach to commodity price fluctuations, the company’s base business outlook remains strong, with a potential understatement of future gains, as Energy Transfer has not typically included marketing windfalls in their initial guidance.
Additionally, Moreen recognizes the company’s strategic capital expenditures, including projects aimed at debottlenecking pipeline infrastructure and enhancing gas-fired power generation capacity. These developments are expected to strengthen Energy Transfer’s position in the market and provide a robust ‘floor’ for the company’s 2024 results. The increase in the company’s capex guidance reflects the initiation of smaller scale projects that are likely to contribute to its growth trajectory, further supporting the Buy rating.

In another report released yesterday, Barclays also assigned a Buy rating to the stock with a $18.00 price target.

ET’s price has also changed moderately for the past six months – from $13.020 to $16.230, which is a 24.65% increase.

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Energy Transfer (ET) Company Description:

Energy Transfer LP provides natural gas pipeline transportation and transmission services. Its projects include Marcus Hook Industrial Complex, Mariner east Pipelines, Mont Belvieu facility, Lone Star Express Expansion, Bakken Pipeline and Lake Charles LNG. Energy Transfer was founded in September 2002 and is headquartered in Dallas, TX.