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Should You Buy, Sell or Hold Energy Transfer Stock Before Q3 Earnings?
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Energy Transfer LP (ET - Free Report) is expected to report an improvement in its top and bottom lines when it reports third-quarter 2024 results on Nov. 6, after market close.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Zacks Consensus Estimate for ET’s third-quarter revenues is pegged at $24.23 billion, indicating a 16.81% increase from the year-ago reported figure.
The consensus estimate for earnings is pegged at 32 cents per unit. The Zacks Consensus Estimate for ET’s third-quarter earnings has remained unchanged in the past 30 days. The estimate suggests year-over-year growth of 3.3%.
Image Source: Zacks Investment Research
Earnings Surprise History
Energy Transfer’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters while lagging in the other two, the average surprise being 5.15%.
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.
Energy Transfer’s quarterly earnings are likely to have benefited from its organic expansion projects and strategic acquisitions of assets. The WTG acquisition, which closed earlier this year, expanded ET’s natural gas pipeline and processing network in the Permian Basin and is likely to have boosted third-quarter earnings.
Energy Transfer’s pipelines are spread across every major production basin in the United States, ensuring diverse earnings sources likely to have contributed to its third-quarter earnings. Fee-based contracts are expected to have contributed to third-quarter earnings like previous quarters.
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. The firm is expanding its natural gas liquids (NGL) export facilities, and the capacity to export nearly 1.1 million barrels per day of NGL is likely to have boosted its performance. Energy Transfer’s more than 130,000 miles of pipelines and related infrastructure spread across 44 states in the United States, which creates demand for its services and contributes to strong performance.
Price Performance and Valuation
ET’s units have gained 30.1% in the past year compared with its industry’s rally of 27.4%.
ET’s Price Performance (One year)
Image Source: Zacks Investment Research
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 10.58X compared with the industry average of 11.98X.
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 industry. EV/EBITDA TTM multiple of PAA and EPD are currently pegged at 8.96 and 9.68, respectively.
Investment Thesis
Energy Transfer has well-spread pipelines across the United States and is increasing its pipeline through organic means and strategic acquisitions. This is assisting the firm in serving domestic producers, exporting NGL and benefiting from the same. Energy Transfer is increasing the processing capacity in the Permian region to capitalize on rising demand.
Energy Transfer depends on some key producers to supply natural gas. The loss of any of these key producers is likely to have adversely impacted its financial results unless the firm can acquire comparable supplies of natural gas from other producers.
Summing 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 company's performance.
Despite some headwinds, it is advisable to accumulate this stock for the long term, given its well-spread assets in the United States, cash distribution ability and focus on expanding operations through organic or inorganic methods.
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Should You Buy, Sell or Hold Energy Transfer Stock Before Q3 Earnings?
Energy Transfer LP (ET - Free Report) is expected to report an improvement in its top and bottom lines when it reports third-quarter 2024 results on Nov. 6, after market close.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The Zacks Consensus Estimate for ET’s third-quarter revenues is pegged at $24.23 billion, indicating a 16.81% increase from the year-ago reported figure.
The consensus estimate for earnings is pegged at 32 cents per unit. The Zacks Consensus Estimate for ET’s third-quarter earnings has remained unchanged in the past 30 days. The estimate suggests year-over-year growth of 3.3%.
Image Source: Zacks Investment Research
Earnings Surprise History
Energy Transfer’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters while lagging in the other two, the average surprise being 5.15%.
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.
Energy Transfer LP Price and EPS Surprise
Energy Transfer LP price-eps-surprise | Energy Transfer LP Quote
Earnings ESP: Energy Transfer has an Earnings ESP of +7.29%.
Zacks Rank: Energy Transfer currently carries a Zacks Rank #3.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Have Shaped ET’s Q3 Earnings
Energy Transfer’s quarterly earnings are likely to have benefited from its organic expansion projects and strategic acquisitions of assets. The WTG acquisition, which closed earlier this year, expanded ET’s natural gas pipeline and processing network in the Permian Basin and is likely to have boosted third-quarter earnings.
Energy Transfer’s pipelines are spread across every major production basin in the United States, ensuring diverse earnings sources likely to have contributed to its third-quarter earnings. Fee-based contracts are expected to have contributed to third-quarter earnings like previous quarters.
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. The firm is expanding its natural gas liquids (NGL) export facilities, and the capacity to export nearly 1.1 million barrels per day of NGL is likely to have boosted its performance. Energy Transfer’s more than 130,000 miles of pipelines and related infrastructure spread across 44 states in the United States, which creates demand for its services and contributes to strong performance.
Price Performance and Valuation
ET’s units have gained 30.1% in the past year compared with its industry’s rally of 27.4%.
ET’s Price Performance (One year)
Image Source: Zacks Investment Research
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 10.58X compared with the industry average of 11.98X.
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 industry. EV/EBITDA TTM multiple of PAA and EPD are currently pegged at 8.96 and 9.68, respectively.
Investment Thesis
Energy Transfer has well-spread pipelines across the United States and is increasing its pipeline through organic means and strategic acquisitions. This is assisting the firm in serving domestic producers, exporting NGL and benefiting from the same. Energy Transfer is increasing the processing capacity in the Permian region to capitalize on rising demand.
Energy Transfer depends on some key producers to supply natural gas. The loss of any of these key producers is likely to have adversely impacted its financial results unless the firm can acquire comparable supplies of natural gas from other producers.
Summing 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 company's performance.
Despite some headwinds, it is advisable to accumulate this stock for the long term, given its well-spread assets in the United States, cash distribution ability and focus on expanding operations through organic or inorganic methods.