Is Energy Transfer (ET) Still Attractive After Strong Five Year Share Price Performance

• If you are looking at Energy Transfer and wondering whether the current price reflects its real worth, you are not alone.
• The stock last closed at US$18.80, with returns of 1.0% over 7 days, 4.5% over 30 days, 13.3% year to date, 7.3% over 1 year and a very large increase over 5 years.
• Recent headlines around Energy Transfer have focused on the broader midstream energy space and ongoing interest in large pipeline and storage assets. This backdrop helps frame how investors may be thinking about the balance of income, growth potential and risk for the stock.
• Right now, Energy Transfer has a valuation score of 4 out of 6. Next, we will walk through what that means across different valuation methods, before finishing with a way to think about value that goes beyond any single model.

Find out why Energy Transfer’s 7.3% return over the last year is lagging behind its peers.

Approach 1: Energy Transfer Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business could be worth by projecting its future cash flows and discounting them back to today using a required rate of return.

For Energy Transfer, the model uses a 2 Stage Free Cash Flow to Equity approach, starting from last twelve months free cash flow of about $5.4b. Analyst estimates are available out to 2030, where free cash flow is projected at $7.2b, with additional years beyond that extrapolated by Simply Wall St. The ten year path includes individual yearly projections and their discounted values, all in $, to arrive at a total present value of those future cash flows.

Putting this together, the DCF model suggests an intrinsic value of about $40.26 per share. Compared with the recent share price of $18.80, the model implies a 53.3% discount, which indicates that Energy Transfer is trading well below this cash flow based estimate.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Energy Transfer is undervalued by 53.3%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.

ET Discounted Cash Flow as at Feb 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Energy Transfer.

Approach 2: Energy Transfer Price vs Earnings

For a profitable business like Energy Transfer, the P/E ratio is a useful way to relate what you pay for each share to the earnings it currently generates. Investors typically look for a P/E that lines up with their expectations for future earnings and the level of risk they are taking on. Higher growth or lower perceived risk can justify a higher P/E, while slower growth or higher risk usually calls for a lower one.

Energy Transfer trades on a P/E of 15.5x. That sits above the Oil and Gas industry average of 14.2x, but below the peer group average of 21.0x. Simply Wall St also calculates a proprietary “Fair Ratio” for the company of 24.5x, which is the P/E they would expect given factors such as its earnings profile, industry, profit margin, market value and identified risks.

This Fair Ratio goes further than a simple peer or industry comparison because it adjusts for company specific traits rather than assuming all Oil and Gas businesses deserve the same multiple. Set against that 24.5x Fair Ratio, Energy Transfer’s current 15.5x P/E screens as cheaper than what this framework would imply.

Result: UNDERVALUED

NYSE:ET P/E Ratio as at Feb 2026

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Upgrade Your Decision Making: Choose your Energy Transfer Narrative

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St’s Community page you can use Narratives, where you and other investors connect Energy Transfer’s story to a set of assumptions on future revenue, earnings and margins. These assumptions roll into a fair value that you can compare with today’s price to decide whether the stock looks expensive or cheap for your own plan. You can also see those Narratives update automatically when new information such as news or earnings arrives. For example, a user who believes projects like Desert Southwest and Lake Charles LNG will support higher contracted volumes, margins and a fair value closer to about US$25 can sit alongside another user who gives more weight to execution, regulatory and energy transition risks and anchors their fair value near US$20, with both perspectives clearly tied to numbers rather than just opinions.

Do you think there’s more to the story for Energy Transfer? Head over to our Community to see what others are saying!

NYSE:ET 1-Year Stock Price Chart

This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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