Energy Transfer LP (ET) Is a Trending Stock: Facts to Know Before Betting on It

Energy Transfer LP (ET) is trending, with its shares down 1.2% over the past month against the S&P 500's 0.6% gain. While the current quarter's EPS is projected to decline 8.6% year-over-year to $0.32, the current and next fiscal years' EPS are expected to grow 12.5% and 1.9%, respectively, and revenue is projected to increase 18.1% and 4.6%. The stock currently holds a Zacks Rank #3 (Hold), suggesting near-term performance in line with the broader market, but its Value Style Score of A indicates it may be undervalued compared to its peers.

Analysis

Energy Transfer LP (ET) has recently underperformed, with its shares declining 1.2% over the past month, contrasting with a 0.6% gain in the S&P 500 composite and a 2.3% loss within its Zacks Oil and Gas - Production Pipeline - MLB industry. The company faces a bifurcated earnings outlook: a projected 8.6% year-over-year decrease in EPS to $0.32 for the current quarter, based on estimates that have remained unchanged over the last 30 days. Conversely, analysts project stronger full-year growth, with current fiscal year EPS anticipated to increase by 12.5% to $1.44 (this estimate has seen a +0.4% revision in the last 30 days), and a further 1.9% rise to $1.47 for the next fiscal year (estimate up +1% recently). Revenue forecasts are notably positive, with consensus estimates indicating a 19.3% year-over-year sales increase to $24.73 billion for the current quarter, and annual revenue growth of 18.1% and 4.6% for the current and next fiscal years, respectively. However, in its last reported quarter, ET delivered mixed results, with EPS of $0.36 surpassing estimates by 9.09%, but revenues of $21.02 billion falling short of consensus by 11.03% and declining 2.8% year-over-year; over the last four quarters, the company has surpassed EPS estimates only once. Despite these operational inconsistencies and recent stock lag, ET boasts a Zacks Value Style Score of 'A', suggesting it trades at a discount to its peers, while its Zacks Rank #3 (Hold) indicates an expectation of near-term performance in line with the broader market.

Key Decisions for Investors

• Investors could consider Energy Transfer LP's attractive valuation, indicated by its 'A' Value Style Score, and its positive full-year earnings and revenue growth projections, despite recent share price weakness and an expected near-term dip in quarterly earnings.
• Close monitoring of upcoming earnings releases is crucial, specifically on revenue realization against projections, given the significant revenue miss in the last reported quarter and a history of only one EPS beat in the last four quarters.
• The Zacks Rank #3 (Hold) implies that the stock may track the broader market in the short term, suggesting that investors looking for significant alpha might need patience or should temper near-term outperformance expectations.