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Should Energy Transfer (ET) Be in Your Portfolio Before Q1 Earnings?
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Energy Transfer LP (ET - Free Report) is scheduled to release first-quarter 2024 results on May 8, after market close. This oil and gas midstream firm reported an average earnings surprise of 3.7% in the last four reported quarters.
The Zacks Consensus Estimate for earnings is pegged at 36 cents per unit on revenues of $23.33 billion. The top- and bottom-line estimates suggest an increase of 22.8% and 12.5%, respectively, from a year ago.
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.
At present, Energy Transfer has an Earnings ESP of -1.39% and a Zacks Rank of 3.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Energy Transfer’s quarterly earnings are likely to have benefited from the contribution of its organic expansion projects. The Bear Processing Plant and Frac VIII addition in the system in 2023 are likely to have boosted performance in the quarter under review. The well-balanced asset mix of the firm is expected to have provided ample opportunity for strong earnings.
The acquisitions of Crestwood Equity Partners and Lotus Midstream have expanded the firm’s operations. The buyouts are also expected to have created more growth opportunities for the firm. The cost synergies generated from these acquisitions are expected to have boosted earnings in the quarter to be reported.
ET’s earnings are also likely to have benefited from rising NGL export volumes. The firm continues to hold a formidable share in global NGL export and is working to expand and export NGL in new markets.
Energy Transfer’s pipelines are spread across every major production basin, ensuring diverse earnings sources that are likely to have boosted its first-quarter bottom line. Fee-based contracts are expected to have generated nearly 90% of its earnings. This, in turn, is also likely to have boosted the company's bottom line in the quarter under discussion.
Headwinds
Despite having a well-spread-out operation, fluctuation in commodity prices, which is beyond the control of the firm, is expected to have negatively impacted its profitability. The firm depends on some key producers for its supply of natural gas. The loss of any of these key producers is likely to have adversely impacted its financial results unless the firm is able to acquire comparable supplies of natural gas from other producers.
Bottom-line
Despite some headwinds, it is advisable to hold on to this stock for the long term, given its positive fundamentals, well spread assets in the United States, ability to pay cash distribution and focus in expanding its operations through organic or inorganic methods.
Stocks to Consider
Here are a few companies from the same sector that, per our model, have the right combination of elements to beat on earnings in their upcoming releases.
California Resources Corporation (CRC - Free Report) is scheduled to release first-quarter numbers on May 7, after market close. CRC has an Earnings ESP of +10.34% and currently has a Zacks Rank #3.
The Zacks Consensus Estimate for earnings indicates a decrease of 4.9% in the past 30 days.
HighPeak Energy Inc. (HPK - Free Report) is slated to report first-quarter figures on May 8, after market close. HPK has an Earnings ESP of +6.03% and currently has Zacks Rank #3.
The Zacks Consensus Estimate for HPK’s earnings suggests a rise of 8.3% in the past 30 days.
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Should Energy Transfer (ET) Be in Your Portfolio Before Q1 Earnings?
Energy Transfer LP (ET - Free Report) is scheduled to release first-quarter 2024 results on May 8, after market close. This oil and gas midstream firm reported an average earnings surprise of 3.7% in the last four reported quarters.
The Zacks Consensus Estimate for earnings is pegged at 36 cents per unit on revenues of $23.33 billion. The top- and bottom-line estimates suggest an increase of 22.8% and 12.5%, respectively, from a year ago.
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here.
At present, Energy Transfer has an Earnings ESP of -1.39% and a Zacks Rank of 3.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Energy Transfer LP Price and EPS Surprise
Energy Transfer LP price-eps-surprise | Energy Transfer LP Quote
Factors Acting in Favor
Energy Transfer’s quarterly earnings are likely to have benefited from the contribution of its organic expansion projects. The Bear Processing Plant and Frac VIII addition in the system in 2023 are likely to have boosted performance in the quarter under review. The well-balanced asset mix of the firm is expected to have provided ample opportunity for strong earnings.
The acquisitions of Crestwood Equity Partners and Lotus Midstream have expanded the firm’s operations. The buyouts are also expected to have created more growth opportunities for the firm. The cost synergies generated from these acquisitions are expected to have boosted earnings in the quarter to be reported.
ET’s earnings are also likely to have benefited from rising NGL export volumes. The firm continues to hold a formidable share in global NGL export and is working to expand and export NGL in new markets.
Energy Transfer’s pipelines are spread across every major production basin, ensuring diverse earnings sources that are likely to have boosted its first-quarter bottom line. Fee-based contracts are expected to have generated nearly 90% of its earnings. This, in turn, is also likely to have boosted the company's bottom line in the quarter under discussion.
Headwinds
Despite having a well-spread-out operation, fluctuation in commodity prices, which is beyond the control of the firm, is expected to have negatively impacted its profitability. The firm depends on some key producers for its supply of natural gas. The loss of any of these key producers is likely to have adversely impacted its financial results unless the firm is able to acquire comparable supplies of natural gas from other producers.
Bottom-line
Despite some headwinds, it is advisable to hold on to this stock for the long term, given its positive fundamentals, well spread assets in the United States, ability to pay cash distribution and focus in expanding its operations through organic or inorganic methods.
Stocks to Consider
Here are a few companies from the same sector that, per our model, have the right combination of elements to beat on earnings in their upcoming releases.
Excelerate Energy, Inc. (EE - Free Report) is set to post first-quarter results on May 8, after market close. EE has an Earnings ESP of +44.44% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
California Resources Corporation (CRC - Free Report) is scheduled to release first-quarter numbers on May 7, after market close. CRC has an Earnings ESP of +10.34% and currently has a Zacks Rank #3.
The Zacks Consensus Estimate for earnings indicates a decrease of 4.9% in the past 30 days.
HighPeak Energy Inc. (HPK - Free Report) is slated to report first-quarter figures on May 8, after market close. HPK has an Earnings ESP of +6.03% and currently has Zacks Rank #3.
The Zacks Consensus Estimate for HPK’s earnings suggests a rise of 8.3% in the past 30 days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.