QQQ   438.73 (-1.19%)
AAPL   170.21 (-2.79%)
MSFT   406.39 (-2.06%)
META   494.00 (-0.84%)
GOOGL   131.93 (-1.06%)
AMZN   175.41 (-1.22%)
TSLA   183.03 (-2.72%)
NVDA   854.28 (+0.23%)
NIO   5.40 (+1.31%)
AMD   202.19 (-1.54%)
BABA   72.10 (+0.14%)
T   17.22 (+2.50%)
F   12.70 (-0.31%)
MU   94.89 (-0.92%)
CGC   2.91 (-3.64%)
GE   161.99 (+0.61%)
DIS   113.37 (-0.28%)
AMC   4.29 (-0.69%)
PFE   25.77 (-0.46%)
PYPL   60.16 (+0.30%)
XOM   105.17 (+0.78%)
QQQ   438.73 (-1.19%)
AAPL   170.21 (-2.79%)
MSFT   406.39 (-2.06%)
META   494.00 (-0.84%)
GOOGL   131.93 (-1.06%)
AMZN   175.41 (-1.22%)
TSLA   183.03 (-2.72%)
NVDA   854.28 (+0.23%)
NIO   5.40 (+1.31%)
AMD   202.19 (-1.54%)
BABA   72.10 (+0.14%)
T   17.22 (+2.50%)
F   12.70 (-0.31%)
MU   94.89 (-0.92%)
CGC   2.91 (-3.64%)
GE   161.99 (+0.61%)
DIS   113.37 (-0.28%)
AMC   4.29 (-0.69%)
PFE   25.77 (-0.46%)
PYPL   60.16 (+0.30%)
XOM   105.17 (+0.78%)
QQQ   438.73 (-1.19%)
AAPL   170.21 (-2.79%)
MSFT   406.39 (-2.06%)
META   494.00 (-0.84%)
GOOGL   131.93 (-1.06%)
AMZN   175.41 (-1.22%)
TSLA   183.03 (-2.72%)
NVDA   854.28 (+0.23%)
NIO   5.40 (+1.31%)
AMD   202.19 (-1.54%)
BABA   72.10 (+0.14%)
T   17.22 (+2.50%)
F   12.70 (-0.31%)
MU   94.89 (-0.92%)
CGC   2.91 (-3.64%)
GE   161.99 (+0.61%)
DIS   113.37 (-0.28%)
AMC   4.29 (-0.69%)
PFE   25.77 (-0.46%)
PYPL   60.16 (+0.30%)
XOM   105.17 (+0.78%)
QQQ   438.73 (-1.19%)
AAPL   170.21 (-2.79%)
MSFT   406.39 (-2.06%)
META   494.00 (-0.84%)
GOOGL   131.93 (-1.06%)
AMZN   175.41 (-1.22%)
TSLA   183.03 (-2.72%)
NVDA   854.28 (+0.23%)
NIO   5.40 (+1.31%)
AMD   202.19 (-1.54%)
BABA   72.10 (+0.14%)
T   17.22 (+2.50%)
F   12.70 (-0.31%)
MU   94.89 (-0.92%)
CGC   2.91 (-3.64%)
GE   161.99 (+0.61%)
DIS   113.37 (-0.28%)
AMC   4.29 (-0.69%)
PFE   25.77 (-0.46%)
PYPL   60.16 (+0.30%)
XOM   105.17 (+0.78%)

Need Yield? Energy Transfer LP Has It And More 

Need Yield? Energy Transfer LP Has It And More 

Energy Transfer LP Gets A Price Target Reduction

Energy Transfer LP (NYSE: ET) just got a price target reduction and we’re glad it did. The news brought the market back into focus and at an opportune time for income investors. The units recently pulled back to support on a correction in natural gas prices and a reduction in the natural gas growth forecast but don’t read too much into that news. 

The outlook for natural gas growth was more than halved and sparked a 35% correction in natural gas prices but the takeaways are bullish. For one, the outlook for natural gas is still growth-oriented and now at more reasonable and sustainable levels, levels that may even allow for upside surprises once Russia's capacity is replaced by other sources. For another, even with the new price target reduction, the analysts are forecasting steady revenue and earnings and by extension a safe and steady dividend. 

Energy Transfer LP is a high-yielding stock delivering more than 7.5% even with the dividend decrease. The company cut the payment by more than 50% in the wake of the pandemic and has only recently begun to bring it back to pre-pandemic levels. As it is, it may be a little while before those levels are reached even with the high price of natural gas. Until then, the payout ratio is running at about 53% of the 2022 consensus estimate for earnings and 50% versus the 2023 estimate. Assuming the company can continue to build on business, we see the company outpacing the consensus in 2022 and posting at least low-single-digit revenue growth in 2023. 

The Analysts Are Pushing Energy Transfer LP Higher 

The 8 analysts with current ratings on Energy Transfer LP are bullish on the stock despite the new price target reduction and their estimates are pushing the market higher. The Marketbeat.com consensus rating is a Buy that has held firm and steady for at least 12 months and it comes with an upwardly trending price target. The new price target reduction has the stock pegged at $13 or up about 25% compared to the $14.25 and 37% implied by the consensus but the consensus is on the rise. The Marketbeat.com consensus rating is up 18.75% versus 1-year ago, 3.8% versus 3 months ago, and 1% in the last 30 days, and we think it may move up again following the next earnings report. 


The analysts are predicting a slight down-turn in both revenue and earnings in Q2 that we don’t see coming. The early spring may have been wet and miserable in most of the country but much of the time since has been hot and should drive demand for natural gas. In our view, the company should easily outpace the consensus. 

The Technical Outlook: Energy Transfer Is Trending Higher 

As ugly as the chart is, Energy Transfer LP is trending higher and offering a trend-following entry point right now. The units pulled back to the 150-day moving average where it is now showing support. Assuming the market follows through on this move we see it moving up to the $12.00 range for a gain of 20% at least. The $12.00 range will be a key turning point, if the market can get above that level we see Energy Transfer LP extending the rally to $14.00 or higher. 


Need Yield? Energy Transfer LP Has It And More 
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Should you invest $1,000 in Energy Transfer right now?

Before you consider Energy Transfer, you'll want to hear this.

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While Energy Transfer currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Energy Transfer (ET)
2.7702 of 5 stars
$15.00+0.7%8.40%13.76Moderate Buy$17.57
Compare These Stocks  Add These Stocks to My Watchlist 

Thomas Hughes

About Thomas Hughes

  • tmhughes.writeon@gmail.com

Contributing Author

Technical and Fundamental Analysis

Experience

Thomas Hughes has been a contributing writer for MarketBeat since 2019.

Areas of Expertise

Technical analysis, the S&P 500; retail, consumer, consumer staples, dividends, high-yield, small caps, technology, economic data, oil, cryptocurrencies

Education

Associate of Arts in Culinary Technology

Past Experience

Market watcher, trader and investor for numerous websites. Founded Passive Market Intelligence LLC to provide market research insights. 


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