ET · Energy Transfer LP Common Units
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $20.67
Updated ·
Price against the kill line
6.1% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $20.67, set on 13 November 2026. The shares are down 5.7% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $20.67, the adjusted close of 14 August 2026, which would erase the three-month decline and show the units leading. A 2027 adjusted EBITDA outlook above $19.9 billion at the fourth-quarter report would also prove the call wrong.
Research onlyNot in the portfolio.
Key figures from the filings · Utilities
Quarter to 30 September 2026, filed 5 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 37,103
- Revenue, change on a year (%)
- +85.9
- Gross margin (%)
- 17.7
- Operating margin (%)
- 7.5
- Free cash flow, four quarters ($M)
- 6,082
- Net cash, cash less debt ($M)
- −67,924
- Price to earnings (×)
- 12.2
- Enterprise value to sales (×)
- 1.1
All filed numbers
What Energy Transfer LP Common Units reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| filed | 37,103 | +85.9 | 17.7 | 7.5 |
| filed | 34,334 | +78.4 | 21.5 | 10.4 |
| filed | 27,771 | +32.1 | 23.8 | 10.7 |
| filed | 25,320 | +29.6 | 23.3 | 8.2 |
| filed | 19,954 | −3.9 | 27.0 | 10.8 |
| filed | 19,242 | −7.2 | 27.5 | 12.0 |
| Pre-tax income ($M) | Not reported |
| Net income ($M) four quarters: 5,477 | 1,207 |
| Diluted shares, change on a year (%) | Not reported |
| Operating cash flow ($M) | 13,569 |
| Capital spending ($M) | 7,487 |
| Free cash flow ($M) | 6,082 |
| Cash and short-term investments ($M) | 926 |
| Debt ($M) long-term debt | 68,850 |
| Net cash, cash less debt ($M) | −67,924 |
| Deferred revenue ($M) +16.3% on a year | 748 |
| Backlog, orders not yet delivered ($M) +9.8% on a year | 37,586 |
| Receivables ($M) | 17,231 |
| Inventory ($M) | 4,951 |
| Shareholders' equity ($M) at 31 March 2026, filed 7 May 2026; including non-controlling interests | 49,737 |
| Market value ($M) | 66,819 |
| Enterprise value, market value plus net debt ($M) | 134,743 |
| Enterprise value to sales (×) | 1.1 |
| Enterprise value to operating income (×) | 11.8 |
| Price to earnings (×) | 12.2 |
| Price to book value (×) | 1.3 |
| Free-cash-flow yield (%) | 9.1 |
Short interest (FINRA, settled 15 October 2026, published 13 November 2026): 0.7% of shares outstanding sold short, 3.0 days of average trading to cover, −6.2% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $21.3M | $0 |
| 12 monthsfrom | $55.3M | $0 |
The thesis
Energy Transfer's units are more likely to lag the S&P 500 over the next three months. Much of the raised 2026 profit outlook comes from commodity gains and one-time items. Spending is also rising. The fourth-quarter report, expected in mid-February 2027, should settle the call: it is where the partnership normally gives 2027 guidance.
The third quarter was strong on paper. Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) were $5.03 billion, up 31% from $3.84 billion a year earlier, according to the partnership's 8-K of 3 November 2026. The company raised its 2026 adjusted EBITDA guidance to $19.7–19.9 billion, from $18.8–19.1 billion. The units still fell. They closed at $19.42 on 12 November 2026 and are down 6.0% over three months.
Wells Fargo's 11 November 2026 note shows why the market is unconvinced. The bank estimates 2027 adjusted EBITDA at $19.7 billion, below its 2026 estimate of $20.04 billion. In its bridge, about $850 million from commodity and optimization earnings fades, $420 million of one-time items rolls off and $100 million is lost to new natural gas liquids contracts. Those losses largely cancel about $680 million from new projects and $310 million from the Vaquero acquisition. Meanwhile the company expects growth capital of about $7 billion in 2027, up from $5.4–5.6 billion in 2026.
The rating is Low because flat 2027 earnings and rising capital spending give the units little to re-rate on before the February report. The market already prices that in. At $19.42 the units yield 7.2% on the $1.37 annualized distribution (Wells Fargo, 11 November 2026), so the risk of a sharp further fall is modest.
Bullish and bearish views on Energy Transfer LP Common Units
The bull case on Energy Transfer LP Common Units (ET), in brief: third-quarter cash flow rose sharply. The bear case: guidance raise leans on commodities.
Bull case
- Third-quarter cash flow rose sharply. Distributable cash flow attributable to partners, as adjusted, was $2.52 billion, up 33% from $1.90 billion a year earlier (third-quarter 8-K, 3 November 2026).
- Distribution raised twenty quarters running. The board declared $0.3425 per unit ($1.37 annualized), more than 3% above the third quarter of 2025 and the twentieth straight quarterly increase (8-K, 3 November 2026).
- Pipelines are coming online on time. Phase I of the Hugh Brinson pipeline entered full service on 1 September 2026, ahead of schedule. Phase II is on schedule for the first quarter of 2027, and the full project is expected to come in under budget (8-K, 3 November 2026).
- New gas projects keep the backlog growing. On 3 November 2026 the company reached a final investment decision on the $1.6 billion South Mississippi Pipeline: 215 miles of 36-inch pipe carrying up to 1.2 billion cubic feet a day, with service targeted for 2030 (Oil & Gas Journal, 3 November 2026).
- A large insider purchase. Director Kelcy Warren bought 1,000,000 units in the open market at an average of $21.26 on 18 August 2026 and 19 August 2026 (SEC Form 4, 20 August 2026). The units now trade below that price.
- Analysts still expect gains. Scotiabank kept Sector Outperform and lowered its target to $23 from $24 on 10 November 2026. Wells Fargo kept Overweight with a $25 target on 11 November 2026.
Bear case
- Guidance raise leans on commodities. On the 3 November 2026 earnings call, management credited much of the $850 million midpoint raise to market volatility and favorable commodity price spreads. Secondary reports of the call also cite a one-time recovery of about $285 million in disputed gas purchases, to be booked in the fourth quarter.
- Wells Fargo models flat 2027 earnings. The bank's 2027 adjusted EBITDA estimate of $19.7 billion is below its $20.04 billion estimate for 2026 (Wells Fargo, 11 November 2026).
- Some growth was bought. The Sunoco segment's adjusted EBITDA rose to $1.05 billion from $489 million a year earlier, mainly because of acquisitions (8-K, 3 November 2026).
- Spending and debt are rising. The company guides about $7 billion of growth capital for 2027 (8-K, 3 November 2026) and priced $2.7 billion of senior notes on 6 November 2026 (company announcement, 6 November 2026).
- Reported profit missed. Net income per common unit was $0.33 against a consensus of $0.40 (MarketBeat, 3 November 2026). The quarter included $379 million of unrealized losses on commodity hedges, which adjusted EBITDA excludes (8-K, 3 November 2026).
Price setup
The units closed at $19.42 on 12 November 2026, 11.1% below the 52-week intraday high of $21.84 set on 10 September 2026. They are down 6.0% from the 14 August 2026 close.
On adjusted daily closes, the last close sits below the 50-day moving average of $20.10 and above the 200-day moving average of $19.02. The 52-week closing low was $16.21 on 18 December 2025.
The units lost ground through the post-earnings weeks. They closed at $18.92 on 6 November 2026, the day the note offering priced, then recovered to $19.42 by 12 November 2026. That recovery leaves them below the 50-day average and below the price Kelcy Warren paid in August.
Catalysts ahead
- ~25 November 2026 (est.): End of the binding open season for the South Mississippi Pipeline. Shows how much customer demand backs the pipeline and sets its final size. It adds to the gas pipeline backlog behind 2027 growth.
- ~31 December 2026 (est.): Expected closing of the roughly $2.6 billion Vaquero Midstream acquisition. Wells Fargo puts Vaquero's contribution at about $310 million of the 2027 earnings bridge. A delay would leave 2027 growth even thinner.
- ~17 February 2027 (est.): Fourth-quarter 2026 report and 2027 guidance. This report decides whether 2027 adjusted EBITDA grows from the $19.7–19.9 billion 2026 range or stays flat, as Wells Fargo models.
What would change the view
A daily close above $20.67, the adjusted close of 14 August 2026, which would erase the three-month decline and show the units leading. A 2027 adjusted EBITDA outlook above $19.9 billion at the fourth-quarter report would also prove the call wrong.
What it trades with
Energy Transfer trades as a high-yield income stock tied to US natural gas and natural gas liquids volumes. It moves more with energy-sector and interest-rate sentiment than with the technology names that lead the S&P 500. In a market led by growth stocks, its lower link to the index can make it lag even when its business holds up.
Its commodity-sensitive earnings, including the optimization gains behind the 2026 raise, tie part of its results to natural gas price spreads. Its stakes in Sunoco LP and USA Compression Partners (USAC) tie part of its results to fuel distribution and compression demand.
Notes
- Energy Transfer is a master limited partnership: holders own common units and receive a Schedule K-1 tax form instead of a Form 1099.
- Energy Transfer holds stakes in Sunoco LP and USA Compression Partners and consolidates them, so results include fuel distribution and compression businesses.
The evidence, claim by claim (8)
- Third-quarter 2026 adjusted EBITDA was $5.03 billion, up 31% from $3.84 billion a year earlier; distributable cash flow attributable to partners, as adjusted, was $2.52 billion, up 33%. Energy Transfer third-quarter 2026 results, 8-K exhibit 99.1 · as of
- 2026 adjusted EBITDA guidance was raised to $19.7–19.9 billion from $18.8–19.1 billion; growth capital is guided at $5.4–5.6 billion for 2026 and about $7 billion for 2027. Energy Transfer third-quarter 2026 results, 8-K exhibit 99.1 · as of
- The quarterly distribution was declared at $0.3425 per common unit ($1.37 annualized), the twentieth consecutive quarterly increase. Energy Transfer third-quarter 2026 results, 8-K exhibit 99.1 · as of
- Sunoco segment adjusted EBITDA rose to $1.05 billion from $489 million a year earlier, mainly from acquisitions. Energy Transfer third-quarter 2026 results, 8-K exhibit 99.1 · as of
- Wells Fargo estimates 2027 adjusted EBITDA at $19.7 billion against $20.04 billion for 2026, with about $850 million of commodity and optimization earnings expected to fade; it keeps Overweight and a $25 target. Wells Fargo note reported by Tradingpedia · as of
- Director Kelcy Warren bought 1,000,000 units in the open market at an average price of $21.26. SEC Form 4 filed 20 August 2026 · as of
- Energy Transfer priced $2.7 billion of senior notes. Energy Transfer announcement and 8-K · as of
- Energy Transfer reached a final investment decision on the $1.6 billion, 1.2 billion cubic feet a day South Mississippi Pipeline, with service targeted for 2030. Oil & Gas Journal · as of
Sources
- Energy Transfer LP - Form 8-K - FY2026 · sec.gov
- Wells Fargo Reaffirms Energy Transfer as Top Q3 Pick · tradingpedia.com ·
- Energy Transfer takes FID on South Mississippi pipeline project, reports 19% earnings jump · ogj.com
- Energy Transfer Reports Third Quarter 2026 Results · morningstar.com
- Energy Transfer (ET) Q3 2026 Earnings Results & Call Transcript · marketbeat.com
- Energy Transfer LP (ET) Stock Price, News, Quote & History · finance.yahoo.com
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