Will Energy Transfer's Wide Pipeline Network Power Long-Term Growth?

Energy Transfer LP ET is strategically positioned to benefit from its vast and diversified midstream infrastructure network, which spans nearly 140,000 miles of pipelines across North America. This integrated system, encompassing natural gas, natural gas liquids (“NGL”), crude oil and refined product transportation, provides a strong competitive advantage. The scale and connectivity of Energy Transfer’s assets allow it to capture volumes across multiple basins, including the Permian, Eagle Ford and Marcellus, while linking them efficiently to key demand centers and export hubs.

Energy Transfer’s geographic and product diversification enhances cash flow stability and reduces exposure to any single commodity or region. The company’s long-term contracts and fee-based earnings insulate the business from short-term commodity price fluctuations. In addition, the extensive infrastructure provides customers with unmatched flexibility and reliability, making Energy Transfer a preferred partner for producers and refiners.

Energy Transfer is well-positioned to capitalize on the continued demand for U.S. energy exports. The company’s Gulf Coast assets, including LNG and NGL export terminals, enable it to serve growing global markets. These strategically located facilities are key to unlocking international pricing and expanding margins. At present, 80 countries and territories benefit from ET’s exports.

With a strong focus on operational efficiency, cost discipline and leveraging its existing infrastructure, Energy Transfer is poised for sustained growth, strong cash flows and steady returns to its shareholders over the long term.

How Midstream Operators Are Benefiting From Rising Demand

Midstream operators are benefiting from rising energy demand, which drives higher volumes through their pipeline, storage and export infrastructure. Long-term contracts and fee-based models ensure stable cash flows, while expanding LNG and NGL exports further enhance profitability and growth opportunities across the sector.

Midstream operators like Kinder Morgan KMI and ONEOK OKE are well-positioned to benefit from rising energy demand through their extensive infrastructure. Kinder Morgan operates an 83,000-mile pipeline network, which supports growing U.S. LNG exports. ONEOK leverages its integrated NGL systems in the Permian and Williston basins to handle increasing production volumes, ensuring strong cash flows and long-term growth.

ET’s Earnings Estimates Moving North

The Zacks Consensus Estimate for Energy Transfer’s 2025 and 2026 earnings per unit indicates an increase of 2.86% and 4.26%, respectively, in the past 60 days.

ET’s Units Are Trading at a Discount

Energy Transfer units are somewhat inexpensive relative to the industry. ET’s current trailing 12-month Enterprise Value/Earnings before Interest, Tax, Depreciation and Amortization (EV/EBITDA) TTM is 10.25X compared with the industry average of 11.53X. This indicates that the firm is presently undervalued compared with its industry. 

ET’s Price Performance

Units of Energy Transfer have risen 10.1% in the past year compared with the Zacks Oil and Gas - Production Pipeline - MLB industry’s growth of 6.3%.

ET’s Zacks Rank

Energy Transfer currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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