Energy Transfer (ET) — Executive Summary

Energy Transfer LP logged a 2.2% change during today's afternoon session, and is now trading at a price of $11.94 per share. Both the S&P 500 and the Nasdaq posted a 1.5% change. ET's trading volume is 15,880,530 compared to the stock's average volume of 18,092,706.

Over the last 52 weeks, the stock moved 42.3%, with a high of $12.95 and a low of $8.1. During this time, the stock underperformed the S&P 500 index by 60.9%.Energy Transfer LP provides energy-related services. The large-cap Energy company has 12,558 full time employees and is based in Dallas, TX. Energy Transfer LP has returned a 7.4% dividend yield over the last 12 months.

Snapshot of the Company's Strong Margins and Improving Cash Flows:

2018-12-31 2019-12-31 2020-12-31 2021-12-31
Revenue (MM) $54,087 $54,213 $38,954 $67,417
Revenue Growth n/a 0.2% -28.2% 73.1%
Gross Margins 17.69% 20.92% 25.13% 19.59%
Gross Margins Growth n/a 18.26% 20.12% -22.05%
Free Cash Flow (MM) $99 $2,043 $2,231 $8,340
FCF Growth n/a 1963.64% 9.2% 273.82%
Net Debt / EBITDA 4.99 4.66 5.29 3.81

Basic Valuation Metrics Show Energy transfer Is Undervalued:

Compared to the Energy sector's average of 9.11, Energy Transfer LP has a trailing twelve month price to earnings (P/E) ratio of 8.9 and, based on its Eps guidance of 1.58, an expected P/E ratio of 7.6. The firm's price to earnings growth (PEG) is -1.91, which indicates that the company is undervalued in terms of its expected earnings growth. Energy Transfer LP's price to book (P/B) ratio is 1.4 compared to its sector average of 1.45.

As of the date of publication, the company is trading -26.2% below their Graham number, implying there is a margin of safety for the stock. We calculate the Graham number as follows:

√(22.5 * TTM earnings per share * book value per share) = √(22.5 * 1.34 * 8.664) = $16.16

There is Mixed Market Sentiment About Energy Transfer LP:

16 analysts are following Energy Transfer LP and have set target prices ranging from $14 to $21 per share. On average, they have given the company a rating of buy. At today's prices, ET is trading -26.82% away from its average analyst target price of $16.31 per share, implying an analyst consensus of strong upside potential for the stock.

The company has an average amount of shares sold short since 3.0% of the company's shares are tied to short positions. Institutions own 43.9% of Energy Transfer LP's shares, while the insider ownership rate stands at 19.79%. The biggest shareholder is Blackstone Inc with a 5.77% stake in the company worth approximately $2,127,478,533.00.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.