Energy Transfer: Trump Administration Tailwinds May Not Be Fully Priced In
Contributor since 2022 / 4958 Followers
Summary:
- A Trump administration is good for Energy Transfer’s business. But the market’s consensus forward EBITDA estimates look too low considering historical volumes and reserves growth in natural gas.
- ET is well-positioned to replenish a higher than usual dip in natural gas storage levels. Seasonality data shows January to have the highest win rate for ET stock.
- ET is trading at a small premium vs its historical valuation multiples and a lower-than usual discount vs peers. However, I think this is acceptable given the tailwinds.
- ET vs SPX500 is showing an ideal bullish technical setup; a retest after a breakout from an accumulating wedge.
- Legal battles with WMB is a risk that can have material financial impact for ET’s EBITDA. WMB has a good track record of winning litigations against ET.
Michael M. Santiago/Getty Images News
Performance Assessment
I’ve had a bullish view on Energy Transfer (NYSE:ET) since my last article. But alas I asked for too much of a discount and held off on rating the stock
Analyst’s Disclosure: I/we have a beneficial long position in the shares of VOO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
I intend to initiate a Long position on ET on Monday.
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