QS Research · Michael Burry's Scion Capital analyst template · 2006
Energy Transfer LP (ET)
As of 2026-11-09 · 11/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction medium · base case -2% · downside -21% · upside +18%
At the 7.8x TTM EV/EBITDA multiple [N25] on $17.10B TTM EBITDA [N14], EV is $133.38B; subtracting $67.94B net debt [N22] and $1.76B leases [N21] leaves $63.68B equity, -2.3% vs the $65.17B market cap [N9]. A downside at $15.5B EBITDA (~9% lower) and the same 7.8x gives $120.9B EV and $51.2B equity, -21.4%; an upside at $18.81B EBITDA (10% higher) gives $146.7B EV and $77.0B equity, +18.2%. Operating momentum is real—Q3 2026 Adjusted EBITDA was $5.03B, +31% y/y, and FY2026 Adjusted EBITDA guidance was raised to $19.7-$19.9B [S5,S31]—but the units still trade at the same 7.8x TTM EBITDA because $67.94B net debt, +9.5%/+27.3%/+229.7% 3y/5y/10y share-count growth [N6-N8] and the 2020 distribution cut/2016 Williams overhang [S53] keep the market skeptical. The discount to peers (PAA/WES/EPD/OKE at 9.8x-10.9x) [S1,N25] is large, but the base is about flat, downside -21%, and upside +18%, so the rule is not met; I call it a watch, with the dated guidance raise and Vaquero close as catalysts to monitor [S5,S89].
Key numbers
- Share price: $18.92
- Market cap: $65.17B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $124.53B
- EV / EBITDA (TTM): 7.8x
- P/E (TTM): 11.9x
The 15 boxes
- ✓ 1. Long-form business notes
ET makes money mainly from fee-based natural gas, NGL/refined products and crude transportation/storage, plus gathering/processing margins, with additional cash distributions from Sunoco LP and USAC. The latest 10-K (dated 2026-02-19) describes a large asset footprint and a fuel-distribution expansion via Sunoco LP's Oct. 31, 2025 Parkland acquisition, while Lake Charles LNG development was suspended in Dec. 2025. XBRL facts show FY2020-to-FY2025 revenue of $38.95B to $85.54B, operating income of $2.98B to $9.03B, and operating cash flow of $7.36B to $10.15B.
- ✓ 2. Competitive advantage
ET's advantage in the sources is physical scale: a large interconnected gas, NGL and crude pipeline/terminal network plus fee, demand-fee and take-or-pay contracts. The 10-K still calls gas services highly competitive, with other pipelines as the main competitors and some rivals having greater capital and supply access, so this is a network/scale advantage rather than pricing power. FY2020-FY2025 operating income stayed positive and operating margin stayed roughly 7.7%-13.0% through large revenue swings. Wholesale fuel and retail are weaker: the 10-K says those markets are fragmented and produce narrow margins.
- ✓ 3. 10-Q takeaways
Q3 2026 reported revenues were $37.103bn vs $19.954bn in Q3 2025, and operating income was $2.781bn vs $2.151bn. Adjusted EBITDA was $5.03bn vs $3.84bn (+31%) and Distributable Cash Flow attributable to partners, as adjusted, was $2.52bn vs $1.90bn (+33%). Management raised FY2026 Adjusted EBITDA guidance to $19.7-$19.9bn, guided 2026 growth capex of $5.4-$5.6bn and about $7bn for 2027, and announced a $0.3425/unit Q3 2026 distribution. The quarter included a $19m favorable LIFO inventory valuation (nine months $445m) and $4.41bn of revolver availability at Sep 30 2026.
- ○ 4. Corporate governance
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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