ET
Energy Transfer LP
$20.36
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 12.5% below fair value
You pay
$20.36
Bear
$18.61
Fair
$23.27
Bull
$27.91
Bear
$18.61
-8.6%
$1.56 × 12x P/E
Fair
$23.27
+14.3%
$1.56 × 15x P/E
Bull
$27.91
+37.1%
$1.56 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
13.1x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $23.00 from 33 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $23.27 per share.
Warnings
The company pays out 99% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples