Energy Transfer units have slid below $17, off more than 15% year-to-date and now yield north of 8%, driven by a marked slowdown in growth with 2025 adjusted EBITDA now expected slightly below the low end of a $16.1–$16.5 billion guidance range (under 4% growth vs. 2024) amid lower oil prices, fewer organic completions and no recent acquisitions. Management is still funding an aggressive growth pipeline — $4.6 billion in growth capex this year and about $5 billion in 2026 — with recent project completions and several gas-processing, NGL fractionation and pipeline projects due to enter service in 2026, plus large-scale developments (Desert Southwest, Dakota Access North, Lake Charles LNG) and new gas-offtake contracts with data centers and utilities that underpin plans to grow distributions 3–5% annually. The stock trades at under 9x EBITDA versus roughly 12x for peers despite what the article describes as the company’s strongest-ever balance sheet, making Energy Transfer appear attractively valued for investors comfortable with MLP tax reporting, although near-term growth remains muted until the new projects ramp.
Units of Energy Transfer (ET) have fallen below $17 and are down more than 15% year-to-date while the S&P 500 has risen ~16%, pushing the distribution yield above 8% and signaling market concern. Management now expects 2025 adjusted EBITDA to land slightly beneath the low end of its $16.1–$16.5 billion guidance range, implying under 4% growth versus 2024 after a 10% CAGR in adjusted EBITDA from 2020–2024 driven by acquisitions (Enable $7.2B, Crestwood $7.1B, WTG $3.3B) and organic projects. The company is funding a heavy growth pipeline with $4.6 billion of growth capex this year and roughly $5.0 billion planned for 2026, and has recently completed gas-processing and NGL work while several projects (Hugh Brinson Phase I, a 9th Mont Belvieu fractionator, an additional gas plant) are slated to enter service in 2026 and add incremental cash flow. Energy Transfer has secured gas offtakes for AI data centers (Oracle flows starting by year-end through mid-2026) and utility contracts (Entergy starting end-2028), and is pursuing large-scale expansions including a $5.3 billion Desert Southwest project (completion expected Q4 2029), Dakota Access North and Lake Charles LNG. The security trades at under 9x EBITDA versus an approximate 12x peer average despite the company’s described strongest-ever balance sheet and management targeting 3–5% annual distribution growth, creating an apparent valuation mismatch if projects ramp as planned. Near-term growth is muted and execution, commodity prices and regulatory approvals are the primary risks; tax treatment (Schedule K-1) further narrows the suitable investor base.
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mildly positive
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0.35
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