Energy Transfer (NYSE:ET) Stock Price Down 1.3% - Time to Sell?

Key Points

• Energy Transfer shares fell 1.3% to $20.48, while trading volume was below average. Despite the decline, analysts maintain a “Moderate Buy” consensus with an average price target of $24.36.
• The company agreed to acquire Vaquero Midstream for approximately $2.625 billion, a deal expected to expand operations and potentially increase cash flow. However, the transaction involves $1.95 billion in cash and 33.3 million new units, raising leverage and dilution concerns.
• Energy Transfer reported strong quarterly results, with EPS of $0.59 beating estimates and revenue rising 78.4% year over year. Its quarterly distribution increased to $0.34 per unit, equivalent to a roughly 6.6% annualized yield.

Shares of Energy Transfer LP (NYSE:ET - Get Free Report) traded down 1.3% on Wednesday. The company traded as low as $20.15 and last traded at $20.48. Approximately 10,057,102 shares were traded during mid-day trading, a decline of 19% from the average session volume of 12,490,107 shares. The stock had previously closed at $20.74.

Trending Headlines about Energy Transfer

Here are the key news stories impacting Energy Transfer this week:

• Positive Sentiment: Energy Transfer agreed to acquire Vaquero Midstream for approximately $2.625 billion, expanding its midstream operations through a bolt-on transaction. Management and bullish commentators view the deal as strategic and potentially accretive, which could support future earnings and cash-flow growth. Consideration includes $1.95 billion in cash and approximately 33.3 million newly issued ET common units. Energy Transfer to Acquire Vaquero Midstream in a $2.625 Billion Transaction
• Positive Sentiment: An analyst resumed coverage with a Buy rating and a $26 price target, citing expected volume growth, strong downstream capacity utilization, ET’s approximately 90% fee-based business mix and limited commodity-price exposure. The forecast calls for mid-single-digit revenue growth and margin expansion in fiscal 2027, potentially exceeding conservative consensus expectations. Energy Transfer: Buy The Dip, Proprietary Forecast Sees Strong Volume Growth
• Neutral Sentiment: Recent investor commentary remains favorable toward ET’s distribution yield, diversified assets, rising volumes and prospects for a larger distribution increase. However, these are opinion-based articles rather than new company guidance. Energy Transfer: Guidance Keeps Rising, And A Bigger Distribution Hike Is Likely Coming
• Negative Sentiment: The Vaquero purchase requires substantial cash and the issuance of 33.3 million new units, creating near-term capital-allocation and dilution concerns. Investors may also scrutinize the impact on leverage and whether the acquisition generates sufficient incremental cash flow to justify its cost. Energy Transfer to buy Vaquero Midstream for $2.63 billion in cash and stock

Analyst Ratings Changes

ET has been the subject of several recent analyst reports. JPMorgan Chase & Co. upped their price objective on Energy Transfer from $24.00 to $25.00 and gave the stock an "overweight" rating in a research report on Friday, September 4th. TD Cowen restated a "buy" rating and issued a $25.00 price target (up from $24.00) on shares of Energy Transfer in a research note on Monday, August 10th. Barclays reaffirmed an "overweight" rating and set a $24.00 price target (up from $23.00) on shares of Energy Transfer in a report on Wednesday, August 5th. Jefferies Financial Group reiterated a "buy" rating on shares of Energy Transfer in a research report on Wednesday, August 5th. Finally, Truist Financial raised their target price on shares of Energy Transfer from $23.00 to $25.00 and gave the company a "buy" rating in a research report on Wednesday, August 12th. Two analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating and three have given a Hold rating to the stock. According to MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus target price of $24.36.

Energy Transfer Stock Down 1.3%

The company has a debt-to-equity ratio of 1.45, a quick ratio of 0.94 and a current ratio of 1.16. The stock's fifty day simple moving average is $20.89 and its two-hundred day simple moving average is $19.97. The stock has a market capitalization of $70.52 billion, a P/E ratio of 13.93, a price-to-earnings-growth ratio of 0.69 and a beta of 0.60.

Energy Transfer (NYSE:ET - Get Free Report) last released its quarterly earnings results on Tuesday, August 4th. The pipeline company reported $0.59 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.38 by $0.21. The firm had revenue of $34.33 billion during the quarter, compared to the consensus estimate of $27.71 billion. Energy Transfer had a net margin of 4.87% and a return on equity of 11.55%. The company's revenue for the quarter was up 78.4% on a year-over-year basis. During the same quarter last year, the firm earned $0.32 earnings per share. As a group, research analysts expect that Energy Transfer LP will post 1.73 EPS for the current fiscal year.

Energy Transfer Increases Dividend

The business also recently announced a quarterly dividend, which was paid on Wednesday, August 19th. Shareholders of record on Friday, August 7th were issued a dividend of $0.34 per share. This represents a $1.36 annualized dividend and a yield of 6.6%. The ex-dividend date of this dividend was Friday, August 7th. This is a boost from Energy Transfer's previous quarterly dividend of $0.3375. Energy Transfer's dividend payout ratio (DPR) is presently 92.52%.

Insider Transactions at Energy Transfer

In related news, Director James Perry acquired 12,359 shares of the business's stock in a transaction that occurred on Friday, August 7th. The shares were bought at an average cost of $20.23 per share, with a total value of $250,022.57. Following the completion of the purchase, the director directly owned 208,046 shares in the company, valued at $4,208,770.58. The trade was a 6.32% increase in their ownership of the stock. The purchase was disclosed in a document filed with the SEC, which is available at this link. Also, Director Kelcy L. Warren bought 647,968 shares of Energy Transfer stock in a transaction that occurred on Wednesday, August 19th. The stock was bought at an average price of $21.26 per share, for a total transaction of $13,775,799.68. Following the completion of the acquisition, the director directly owned 147,901,879 shares of the company's stock, valued at $3,144,393,947.54. The trade was a 0.44% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. Insiders acquired a total of 1,012,359 shares of company stock worth $21,513,543 in the last quarter. Corporate insiders own 3.28% of the company's stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently modified their holdings of the company. Summit Securities Group LLC raised its stake in Energy Transfer by 179.0% in the 1st quarter. Summit Securities Group LLC now owns 162,100 shares of the pipeline company's stock valued at $3,129,000 after acquiring an additional 104,000 shares during the period. North Star Investment Management Corp. increased its stake in shares of Energy Transfer by 39.0% in the first quarter. North Star Investment Management Corp. now owns 224,439 shares of the pipeline company's stock worth $4,332,000 after purchasing an additional 62,916 shares in the last quarter. Sanctuary Advisors LLC raised its position in shares of Energy Transfer by 15.8% in the first quarter. Sanctuary Advisors LLC now owns 1,888,661 shares of the pipeline company's stock valued at $36,451,000 after purchasing an additional 257,954 shares during the period. Mizuho Markets Americas LLC purchased a new stake in shares of Energy Transfer during the 1st quarter valued at approximately $61,760,000. Finally, Independent Financial Group LLC bought a new position in Energy Transfer in the 1st quarter worth approximately $2,170,000. Institutional investors and hedge funds own 38.22% of the company's stock.

Energy Transfer Company Profile

Energy Transfer LP is a diversified energy infrastructure company headquartered in Dallas, Texas. The partnership owns and operates a broad network of pipelines, processing facilities, storage assets and terminals that support the movement of natural gas, natural gas liquids, crude oil and refined products across the United States.

The company's operations include gathering and processing natural gas, transporting and storing natural gas and NGLs, fractionating NGLs into component products, and transporting crude oil and refined products.

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