Energy Transfer (ET) Plunges 0.83% Amid Macro Pressures, Hits 2025 Low

Energy Transfer (ET) fell 0.83% on Monday, marking its sixth consecutive day of declines with a cumulative drop of 4.58% over the period. The stock reached its lowest level since May 2025, with an intraday slide of 0.89%, reflecting heightened market caution amid broader economic and sector-specific pressures.

The recent selloff has been driven by macroeconomic uncertainties, including inflation-driven borrowing cost hikes and global energy supply chain volatility. As a capital-intensive midstream operator, Energy Transfer faces elevated debt financing costs in a rising rate environment, which has dampened investor sentiment. Despite these challenges, the company’s core infrastructure demand remains resilient due to the inelastic nature of energy transportation needs, suggesting the decline may be an overreaction to short-term macro noise.

Valuation metrics highlight a significant undervaluation. A discounted cash flow analysis estimates an intrinsic value of $41.55 per share, compared to the current $16.80, indicating a 59.6% discount. The stock’s price-to-earnings ratio of 12.9x trails its industry peers, while a proprietary fair ratio of 19.9x suggests a 35% undervaluation. These indicators point to potential long-term upside, though near-term earnings are expected to contract by 8.57% in the next quarter due to sector-wide headwinds.

Insider activity has added complexity to the narrative. Executive chairman Kelcy Warren’s $34.7 million unit purchase in August 2025 signals management confidence, yet historical governance concerns—such as 2016’s controversial convertible securities issuance—linger. While the 7.5% dividend yield appears supported by strong distributable cash flow, past distribution cuts during the 2020 pandemic raise questions about sustainability. This contrasts with peers like Enterprise Products Partners, which has maintained 27 consecutive annual distribution increases.

Analysts project $24.73 billion in revenue for the upcoming quarter, a 19.31% year-over-year increase, underscoring operational scalability. However, a Zacks Rank of #3 (Hold) and unchanged analyst revisions highlight cautious expectations. The stock’s performance ultimately hinges on its ability to balance growth with unitholder trust, as macroeconomic risks and corporate governance history remain critical factors for investors to weigh.