We came across a bullish thesis on Energy Transfer LP (ET) on wallstreetbets Subreddit Page by rawj5561. In this article, we will summarize the bulls’ thesis on ET. Energy Transfer LP (ET)’s share was trading at $18.92 as of Feb 25th. ET’s trailing and forward P/E were 14.78 and 10.25 respectively according to Yahoo Finance.
An oil and gas crew working on a midstream pipeline, illuminated against a dusk sunlit sky.
Energy Transfer (ET) is a leading midstream energy company with a robust infrastructure network that positions it for long-term growth. The company has a diversified portfolio of assets spanning natural gas, crude oil, and refined product transportation, storage, and processing. ET recently secured a groundbreaking agreement with CloudBurst Data Centers, marking its first publicized partnership in the data center space. With interest from over 70 prospective data centers across 12 states, ET is set to benefit from increasing demand for reliable energy sources, particularly as AI-driven energy consumption continues to grow.
The company is aggressively expanding, with $5 billion allocated for growth in 2025, a significant increase from $3 billion in 2024. This capital expenditure will drive additional fee-based revenue, strengthening ET’s earnings power. The company’s latest earnings report showed 8% EBITDA growth, and management forecasts continued expansion in 2025, reinforcing its ability to generate stable cash flows. ET’s valuation remains attractive, trading at an EV-to-EBITDA multiple of 8.5 times the high end of its 2025 guidance, still below pre-pandemic levels.
Regulatory shifts also play in ET’s favor. If offshore drilling restrictions are reversed under a new administration, midstream operators like ET will benefit from increased production and transportation needs. Additionally, ET continues to return capital to shareholders, with a recent dividend increase reflecting confidence in its financial outlook. While some of its growth projects will not come online until 2026, the long-term investment case remains strong. With its dominant market position, expanding asset base, and favorable industry tailwinds, ET presents a compelling opportunity for investors seeking exposure to the midstream sector.
Energy Transfer LP (ET) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held ET at the end of the third quarter which was 29 in the previous quarter. While we acknowledge the risk and potential of ET as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ET but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.