Energy Transfer (NYSE:ET) is scheduled to announce Q3 earnings results on Wednesday, November 1, after market close. The consensus EPS estimate is $0.25 (-13.8% Y/Y) and the consensus revenue estimate is $20.39 billion (-11.1% Y/Y). Over the last 1 year, ET has beaten EPS estimates 100% of the time and has beaten revenue estimates 75% of the time. Over the last 3 months, EPS estimates have seen 0 upward revisions and 2 downward. Revenue estimates have seen 2 upward revisions and 3 downward. The company on August 2 reported Q2 GAAP EPS of $0.25, missing estimates by 7 cents. Revenue of $18.32 billion was down 29.3% from last year and was below expectations by $2.08 billion. ET has a Quant rating of “HOLD”, with a 3.37 rating score. ET has an industry ranking of 20 out of 58 among oil & gas storage and transportation stocks, as per SA’s Quant ranking. Wall Street rates the ET stock “STRONG BUY” and Seeking Alpha authors rate it “BUY”. ET stock rose 47.2% in 2022, while the benchmark S&P 500 Index slipped nearly 20% for the year. Stock is up 24.5% so far this year as of Tuesday’s close. The S&P 500 Energy Sector Index is down 3.24% YTD.
Recent commentary on ET
“Energy Transfer continues to be a good holding for those investors who desire to earn a high level of income from their portfolios while still enjoying some growth potential. Admittedly, it is somewhat unlikely that the nation’s upstream energy producers will deliver growth that is anywhere close to what some market participants expect, but there are still sufficient opportunities in the natural gas space for Energy Transfer to deliver volume growth. The pending acquisition of Crestwood Equity Partners is interesting, and it should significantly enhance Energy Transfer LP’s potential to deliver natural gas midstream growth to the unitholders. The company continues to maintain relatively strong finances and pays a very attractive 8.84% distribution yield. Overall, this company looks like a very solid purchase today,” writes SA contributor and leader of the “Energy Profits in Dividends” Investing Group, Power Hedge, in an October 20 report.
“Some in this community aren’t going to trust Energy Transfer ever again after what they have endured, and that’s fine. Investing always involves risk and for those who are willing to tolerate Energy Transfer’s risks, my opinion is that the rewards could be worth the risk. The company’s free cash flow after distributions is enough to cover its growth and maintenance capex spending. Energy Transfer’s balance sheet has finally stabilized. The company is arguably further strengthening its business via a $7.1 billion merger with Crestwood. Finally, units of Energy Transfer seem to be priced 20%-plus below my estimated fair value. The stock’s 9% distribution yield, low- single-digit annual growth, and 2.5% annual valuation multiple expansion potential promise annual total returns well beyond my 10% preference for the next decade,” writes SA contributor Kody’s Dividends in an October 11 report.