Oil & Gas Midstream · NYSE
Current Price
$19.76
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Energy Transfer LP with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
Energy Transfer LP provides energy-related services. The company owns and operates approximately 11,600 miles of natural gas transportation pipeline, and three natural gas storage facilities in Texas and two natural gas storage facilities located in the state of Texas and Oklahoma; and 19,830 miles of interstate natural gas pipeline. It also sells natural gas to electric utilities, independent power plants, local distribution and other marketing companies, and industrial end-users. The company owns and operates natural gas gathering and natural gas liquid (NGL) pipeline, processing plant, and treating and conditioning facilities in Texas, New Mexico, West Virginia, Pennsylvania, Ohio, Oklahoma, Arkansas, Kansas, and Louisiana; natural gas gathering, oil pipeline, and oil stabilization facilities in South Texas; and a natural gas gathering system in Ohio, as well as transport and supplies water to natural gas producer in Pennsylvania. It owns approximately 5,215 miles of NGL pipeline; NGL and propane fractionation facilities; NGL storage facilities with working storage capacity of approximately 50 million barrels (MMBbls); and other NGL storage assets and terminal with an aggregate storage capacity of approximately 17 MMBbls. The company provides crude oil transportation, terminalling, acquisition, and marketing activities; and sells and distributes gasoline, middle distillate, and motor fuels and other petroleum product. It offers natural gas compression service; carbon dioxide and hydrogen sulfide removal, natural gas cooling, dehydration, and British thermal unit management service; and manages coal and natural resources properties, as well as sells standing timber, leases coal-related infrastructure facilities, collects oil and gas royalty, and generate electrical power. The company was formerly known as Energy Transfer Equity, L.P. and changed its name to Energy Transfer LP in October 2018. The company was founded in 1996 and is headquartered in Dallas, Texas.
ROIC (TTM)
7.2%
ROE (TTM)
14.1%
FCF Yield
5.66%
Based on trailing twelve-month data, ET shows a free cash flow per share of N/A and a ROIC of 7.2%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 5.66% are important context metrics when evaluating ET's stock valuation relative to peers.
The intrinsic value of ET depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether ET is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $19.76. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Energy Transfer LP: (1) Start with the trailing free cash flow per share 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, and (4) add a terminal value for cash flows beyond the projection period.
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 Oil & Gas Midstream will produce over the next 5-10 years, then discounting those amounts to today's dollars. ET's ROIC of 7.2% suggests the company may face challenges generating returns above its cost of capital.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For ET, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
