Morningstar

Energy Transfer Earnings: Growth in 2024 Sets Up an Impressive Outlook for 2025-27

Natural gas liquids gathering, processing, and transportation volumes were up in 2024 and are a key growth area for the next few years.

The Energy Transfer logo is displayed on a smartphone screen.
Cheng Xin via Getty
Securities in This Article
Energy Transfer LP
(ET)

Key Morningstar Metrics for Energy Transfer

What We Thought of Energy Transfer’s Earnings

Energy Transfer ET reported $15.5 billion in adjusted EBITDA and $1.28 per common unit of adjusted net income for 2024, in line with our outlook and management’s guidance. Adjusted EBITDA was up 13% from 2023, setting a new company record.

Why it matters: Volume growth from expansion projects and acquisitions in all of Energy Transfer’s segments boosted results in 2024. We expect similar broad-based growth during the next few years, based on the company’s investment backlog.

  • Management expects $16.1 billion-$16.5 billion in adjusted EBITDA in 2025, in line with our forecast. A key part of the growth is a full year of contributions from the $3.1 billion WTG Midstream acquisition, which closed in July.
  • Natural gas liquids gathering, processing, and transportation volumes were up in 2024 and are a key growth area for the next few years.

The bottom line: We are reaffirming our fair value estimate of $21 per share and no-moat rating for Energy Transfer.

  • The firm’s partnership units are up 25% since October and now trade at a 5% discount to our fair value estimate as of Feb. 11, which is the smallest discount in eight years.
  • Management raised the quarterly distribution by 1% to $0.325 per unit, the 13th consecutive quarterly distribution increase. We expect similar growth at least until 2027.

Big picture: Management expects to invest $5 billion in growth projects in 2025, double the average annual run rate from the last five years. We expect growth investment to fall in 2026, but it could remain above $3 billion, given secular growth opportunities in Texas and the southern United States. Acquisitions are another potential source of growth.

  • Energy Transfer’s contract with CloudBurst Data Centers to deliver gas for onsite power generation in central Texas could be a model that leads to more direct-supply contracts with data centers.

Coming up: Many of Energy Transfer’s growth projects will begin development in 2025.

Energy Transfer Stock vs. Morningstar Fair Value Estimate

Source: Morningstar Direct. Latest price as of 10:09 AM EST. Data as of Feb. 12, 2025.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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