ET Stock Rallies Past Industry in a Month: Should You Buy or Hold?

• ET's 2026 and 2027 earnings estimates have risen 16.08% and 11.84% respectively in the past 60 days, supported by new data center demand adding approximately 650 MMcf/d and long-term contracts for 300,000 Bbls/d on y-grade assets
• The stock trades at an EV/EBITDA multiple of 9.51X versus the industry average of 11.22X, representing a valuation discount despite its extensive 140,000-mile pipeline network across 44 states
• ET's debt-to-capital ratio of 57.52% exceeds the industry's 55.85%, and its trailing 12-month ROE of 11.55% lags the industry average of 14.22%, warranting a Hold rating despite positive momentum

Energy Transfer Stock Analysis Summary

Key Performance Metrics

Energy Transfer LP (ET) has gained 5.9% over the past month, outperforming its industry (+3.1%), sector (+5.8%), and the S&P 500 (+3.7%). The stock currently trades at a trailing 12-month EV/EBITDA of 9.51X, below the industry average of 11.22X, indicating undervaluation.

Business Fundamentals

The midstream energy company operates over 140,000 miles of pipelines across 44 U.S. states. Nearly 90% of revenues derive from fee-based transportation and storage services, providing stable cash flow visibility and reduced commodity price exposure. The company maintains NGL export capacity exceeding 1.3 million barrels per day.

Growth Drivers

Energy Transfer expects 2026 capital expenditures of $5.6-$5.9 billion to expand operations. Key growth catalysts include:

• Rising data center demand, including a 900-MW AI campus expansion in Abilene
• New power plant connections adding 300 MMcf/d capacity
• Long-term contracts for 300,000 barrels/day on y-grade assets extending into the 2030s

Earnings Outlook

The Zacks Consensus Estimate shows 2026 and 2027 earnings per unit increasing 16.08% and 11.84% respectively over the past 60 days.

Risk Factors

ET's return on equity (11.55%) trails the industry average (14.22%), and its debt-to-capital ratio (57.52%) exceeds industry peers (55.85%). Higher operating costs and lower NGL/natural gas prices present headwinds.

Investment Rating

Energy Transfer holds a Zacks Rank #3 (Hold), suggesting current investors maintain positions while prospective buyers await better entry opportunities.