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Key Takeaways
- Energy Transfer is set to report Q4 results on Feb. 17, with revenues seen up 33% year-over-year.
- The company's fee-based contracts, new gas supply deals, and added plants will likely support earnings.
- Energy Transfer has been trading at 9.13x EV/EBITDA vs. the industry's 10.35x, but estimates have dipped in the past 60 days.
Energy Transfer LP (ET - Free Report) is expected to post a year-over-year improvement in both revenues and earnings when it reports fourth-quarter 2025 results on Feb. 17, before the market opens.
The Zacks Consensus Estimate for Energy Transfer’s fourth-quarter revenues is pegged at $26.02 billion, indicating a 33.16% increase from the year-ago reported figure.
Image Source: Zacks Investment Research
The consensus estimate for earnings is pegged at 34 cents per unit. The Zacks Consensus Estimate for Energy Transfer’s fourth-quarter earnings indicates a 5.56% decline in the past 60 days.
Image Source: Zacks Investment Research
Energy Transfer’s Surprise History
Energy Transfer’s earnings missed the Zacks Consensus Estimate in two of the trailing four quarters, while surpassing it in one and reporting on par in the remaining quarter, resulting in an average negative surprise of 6.38%.
Image Source: Zacks Investment Research
What the Zacks Model Unveils
Our model does not conclusively predict an earnings beat for Energy Transfer this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) rating increases the chances of an earnings beat. That is not the case here, as you can see below.
Energy Transfer LP Price and EPS Surprise
Image Source: Zacks Investment Research, Energy Transfer LP Quote
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Energy Transfer has an Earnings ESP of -1.07%. Additionally, Energy Transfer currently carries a Zacks Rank #3 (Hold) rating.
Stocks to Consider This Season
Here are some stocks in the same sector that have the combination of factors indicating an earnings beat this season.
Constellation Energy (CEG - Free Report), Excelerate Energy (EE - Free Report), and Par Pacific Holdings Inc. (PARR - Free Report) all currently share a Zacks Rank of #3 (Hold) rating. Constellation Energy, Excelerate Energy, and Par Pacific Holdings’s Earnings ESP readings are currently pegged at +3.13%, +1.03%, and +1.24%, respectively.
Constellation Energy, Excelerate Energy, and Par Pacific Holdings reported average earnings surprises of 3.23%, 26.72%, and 77.46%, respectively, in the past four quarters.
Factors Likely to Have Shaped Energy Transfer’s Q4 Earnings
Fee-based contracts are estimated to have generated nearly 90% of Energy Transfer’s earnings, a pattern that is expected to persist in the performance of the to-be-reported quarter. These largely fee-driven arrangements offer a stable and predictable revenue base, which is likely to have supported the company’s fourth-quarter performance.
Energy Transfer has entered into multiple long-term natural gas supply agreements with major customers, which are similarly expected to have positively impacted fourth-quarter earnings. In addition, the company has brought new processing plants online, enabling it to meet rising demand in service areas and further enhance earnings.
The company’s earnings are expected to have benefited from robust NGL export volumes. Energy Transfer’s export terminals provide exceptional flexibility and ship-loading capabilities, enabling exports to more than 55 countries. With roughly 1.4 million barrels per day of export capacity, this segment is likely to have played a meaningful role in the company's fourth-quarter performance.
The company has continued to leverage its extensive pipeline network across major production basins to benefit from rising hydrocarbon output. After higher volumes of natural gas, crude oil, and natural gas liquids were transported in the third quarter, a similar trend is likely to have carried into the fourth quarter.
Energy Transfer Stock Trading at a Discount
Energy Transfer units appear to be somewhat inexpensive on a relative basis, with the stock's trailing 12-month Enterprise Value/Earnings before Interest Tax Depreciation and Amortization (EV/EBITDA TTM) being 9.38X compared with the industry average of 11.27X.
Image Source: Zacks Investment Research
Energy Transfer Stock’s Price Performance
Energy Transfer’s units have gained 5.1% in the past six months compared with the Zacks Oil and Gas Production Pipeline – MLB industry’s rise of 9%.
Image Source: Zacks Investment Research
Investment Thesis
Energy Transfer manages a vast network of nearly 140,000 miles of pipelines and associated infrastructure across 44 states, giving it a strong strategic advantage to benefit from rising U.S. production of oil, natural gas, and natural gas liquids.
Continued investments to expand pipeline and processing capacity are set to reinforce Energy Transfer’s leadership in the midstream space. Its robust LNG export capabilities, alongside growing domestic demand, are expected to continue supporting performance growth.
Yet, the company relies on several major producers for its natural gas supply, and the loss of any one of them could negatively affect financial results unless comparable sources are quickly replaced.
Summing Up
Energy Transfer has continued to capitalize on rising demand by efficiently utilizing its expansive U.S. asset base. Strategic acquisitions, alongside organic growth initiatives, have further enhanced the company’s overall performance.
The long-term outlook remains favorable, underpinned by the company’s wide geographic reach and continued focus on expanding operations through both organic growth and strategic acquisitions. That said, near-term softness in the Bakken region might have weighed on storage margins.
In the quarter to be reported, earnings estimates have gone down over the past 60 days. The stock has also returned lower than its industry in the past six months. So, investors should exercise caution, and perhaps consider staying on the sidelines for now and waiting for a better entry point after the earnings release.
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