ET - Energy Transfer: Still Discounted According To Graham

2024-03-22 10:26:23 ET

Summary

• Energy Transfer LP stock is still a buy in my view despite a price near multi-year peak levels.
• It has a projected EPS annual growth rate of 7%+, which I think is feasible given catalysts like the acquisition of Crestwood Equity Partners.
• Valuation metrics, including Graham's approach, still suggest that ET is undervalued compared to its market price.
• At the same time, an ~8% dividend provides nonnegligible downside protection in the case of a market downturn.

ET is a still a buy

My last article on Energy Transfer LP ( ET ), published in Oct 2023, argued for a strong buy thesis. The argument was largely built on the potential for oil price recovery, considering catalysts like the persisting inflation and the Israel-Gaza conflict....

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