Energy Transfer LP (ET): A Bull Case Theory

We came across a bullish thesis on Energy Transfer LP on Value investing subreddit by The_Brand94. In this article, we will summarize the bulls’ thesis on ET. Energy Transfer LP's share was trading at $16.59 as of December 2nd. ET’s trailing and forward P/E were 13.46 and 10.87 respectively according to Yahoo Finance.

Enterprise Products Partners (ET) is a midstream oil and natural gas pipeline and transmission services company, acting as a toll operator behind the meter. Its business model is relatively insulated from broad economic cycles, as revenue is primarily driven by volumes transported and stored through its infrastructure.

While oil prices remain depressed, the key growth driver is natural gas, which is expected to remain central to energy demand over the next 2–5 years before nuclear energy becomes a more significant factor. ET’s fair value is estimated between $21–$22, implying roughly 25% undervaluation versus peers, and it offers a high current dividend yield of about 8% with a normal growth rate of 4–7% CAGR.

Beyond its baseline stability, ET stands to benefit from rising energy demand linked to AI and data center expansion. The company has already secured partnerships with a Colorado-based data center and Fermi’s gigawatt energy campus in Texas, with further agreements in progress. Planned expansions, particularly in Texas natural gas capacity, strengthen its growth trajectory, and recent rate cuts further enhance the outlook. Modeling suggests ET could reach $30+ per share by 2028, delivering steady, linear growth that outpaces the S&P through both price appreciation and dividend stability.

Options markets appear undervalued, particularly long-dated LEAPS through 2027–2028, offering potentially outsized returns versus intrinsic value, as many existing investors focus on income rather than growth. With minimal downside risk, recurring cash flows, and structural tailwinds from energy demand and data center expansion, ET represents a compelling investment for both value-oriented and passive income investors. Whether through shares or options, the company presents a unique opportunity to capture steady upside while benefiting from a resilient and expanding energy infrastructure platform.

Previously we covered a bullish thesis on Energy Transfer LP (ET) by rawj5561 in February 2025, which highlighted the company’s midstream infrastructure, data center partnerships, and stable cash flow. The company's stock price has depreciated approximately by 12.31% since our coverage. The thesis still stands as long-term natural gas demand supports growth. The_Brand94 shares a similar view but emphasizes ET’s undervaluation and dividend yield.

Energy Transfer LP is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held ET at the end of the second quarter which was 36 in the previous quarter. While we acknowledge the potential of ET as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.