Energy Transfer LP (ET) Stock Valuation — DCF Analysis
Oil & Gas Midstream · NYSE
Current Price
$19.07
Intrinsic Value
$23.48
+18.8% margin of safety
COMPETITIVE MOAT
↑Extensive Midstream Infrastructure
ET possesses a vast network of pipelines and storage facilities, creating significant barriers to entry for competitors. This integrated system efficiently moves energy products across North America.
↑Diversified Business Segments
The company operates across NGLs, crude oil, refined products, and natural gas, reducing reliance on any single commodity. This diversification provides stability and resilience.
↑Long-Term Fee-Based Contracts
A substantial portion of ET's revenue is secured through long-term contracts, offering predictable cash flows. This insulates the company from short-term commodity price volatility.
INVESTMENT RISKS
↓Regulatory and Environmental Scrutiny
The midstream sector faces increasing regulatory oversight and environmental concerns. Potential new regulations or compliance costs could impact operations and profitability.
↓Commodity Price Fluctuations
While mitigated by contracts, significant swings in energy prices can still affect volumes and contract renewals. Lower demand for transported products poses a risk.
↓Interest Rate Sensitivity
As a capital-intensive business with significant debt, ET is sensitive to rising interest rates. Higher borrowing costs could strain cash flow and limit expansion opportunities.
Base case
ET base case valuation
A base case discounted cash flow model for ET estimates an intrinsic value of about $23.48 per share, against a current price of $19.07. The model assumes 9.1% annual free cash flow growth, a 10.0% discount rate, and a 18x exit multiple.
Intrinsic Value
$23.48
Margin of safety
+18.8%
Expected annual return
+4.3%
Base case assumptions: 9.1% annual growth, 10.0% discount rate, 18x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ET valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Energy Transfer LP respond.
Open DCF Calculator for ETCompany Overview
Energy Transfer LP functions as a comprehensive provider of energy infrastructure and associated services. The company operates extensive natural gas networks, including approximately 11,600 miles of intrastate transportation pipelines and an additional 19,830 miles dedicated to interstate transport. Its natural gas storage capabilities encompass three facilities in Texas and another two spanning Texas and Oklahoma. Energy Transfer supplies natural gas to a diverse range of customers, such as electric utilities, independent power producers, local distribution companies, other marketing firms, and various industrial end-users. Beyond transportation, the firm manages substantial infrastructure for gathering, processing, treating, and conditioning natural gas and natural gas liquids (NGLs) across a broad geographic area that includes Texas, New Mexico, West Virginia, Pennsylvania, Ohio, Oklahoma, Arkansas, Kansas, and Louisiana. This infrastructure also covers natural gas gathering systems in Ohio, and integrated natural gas gathering, oil pipeline, and oil stabilization facilities situated in South Texas. Additionally, the company provides water transport and supply services to natural gas producers in Pennsylvania. In the NGL sector, Energy Transfer possesses approximately 5,215 miles of NGL pipelines, along with facilities for NGL and propane fractionation. Its NGL storage solutions include facilities with a working capacity of around 50 million barrels (MMBbls), supplemented by additional storage assets and terminals totaling about 17 MMBbls. The company is actively involved in the transportation, terminalling, acquisition, and marketing of crude oil, as well as the distribution of refined petroleum products like gasoline, middle distillates, and motor fuels. Complementing these primary operations, Energy Transfer offers specialized services such as natural gas compression, removal of carbon dioxide and hydrogen sulfide, natural gas cooling, dehydration, and British thermal unit (BTU) management. Furthermore, its operations extend to managing coal and other natural resource properties, selling standing timber, leasing coal-related infrastructure, collecting oil and gas royalties, and generating electrical power. Established in 1996 and headquartered in Dallas, Texas, the company officially adopted its current name, Energy Transfer LP, in October 2018, having previously been known as Energy Transfer Equity, L.P.
Financial Metrics — ET Stock Valuation Data
Revenue/Share (TTM)
$25.98
FCF/Share (TTM)
$1.06
ROIC (TTM)
7.4%
ROE (TTM)
14.0%
P/FCF
18.0x
EV/EBITDA
9.2x
FCF Yield
5.57%
Debt/Equity
2.06x
Based on trailing twelve-month data, ET shows a free cash flow per share of $1.06 and a ROIC of 7.4%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 18.0x and FCF yield of 5.57% are important context metrics when evaluating ET's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of ET?
Energy Transfer LP currently generates $1.06 in free cash flow per share. At the current price of $19.07, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is ET undervalued?
ET trades at a P/FCF ratio of 18.0x with a free cash flow yield of 5.57%. This P/FCF is in a moderate range. However, whether ET is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value ET stock using DCF?
To perform a DCF valuation on Energy Transfer LP: (1) Start with the trailing free cash flow per share ($1.06) as the base, (2) project future FCF growth over 5-10 years based on Oil & Gas Midstream industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting ET's risk profile — with a debt-to-equity of 2.06x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to ET?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Energy Transfer LP, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Oil & Gas Midstream trends, then discounting those amounts to today's dollars. ET's ROIC of 7.4% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect ET stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For ET, with a debt-to-equity ratio of 2.06x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 9.2x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See ET PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Energy valuationsDCF and P/E value ET with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.