Energy Transfer raised its 2026 EBITDA target to $18.2-18.6 billion, accelerating growth from 3.2% to 14-16% YoY. The unit price is up 24% YTD, but valuation remains the lowest in its peer group, suggesting room for further gains.
Energy Transfer (NYSE: ET) raised its 2026 adjusted EBITDA target to $18.2 billion to $18.6 billion, up from an earlier $17.5 billion to $17.9 billion range. The new guidance implies year-over-year growth of 13.9% to 16.4%, a sharp acceleration from the 3.2% gain in 2025. The master limited partnership's unit price has climbed 24% year to date, far outpacing the S&P 500's roughly 9% advance. The rally reverses a 15.8% decline in 2025, when slower earnings growth, fewer project completions and a lack of deals weighed on the stock.
Matt DiLallo of The Motley Fool noted that Energy Transfer's valuation remains the lowest in its peer group despite the rebound. That gap could narrow as the company captures additional catalysts. One likely driver is further upward revisions to the 2026 outlook. Most oil analysts had assumed the Strait of Hormuz would reopen this year, allowing oil to flow freely. Iran has continued to attack vessels, and the U.S. has resumed naval blockades, keeping upward pressure on crude prices.
Energy Transfer has limited direct exposure to oil prices. Higher prices still incentivize U.S. producers to drill more wells, raising volumes on the company's crude oil pipelines and at its export terminals. The system also moves oil in and out of the Strategic Petroleum Reserve, which is likely to keep draining this year, DiLallo said. Beyond crude, the company has approved several new growth projects, including a $600 million gas pipeline lateral to supply new gas-fired power plants. Surging demand from AI data centers is boosting natural gas consumption, which could lead to additional expansion opportunities later this year.
Affiliated MLPs Sunoco LP and USA Compression Partners contributed to the growth through acquisitions closed in late 2025 and early 2026. The reacceleration in EBITDA supports distributable cash flow and the partnership's distribution coverage ratio, which stood at 1.7x in the first quarter. A higher coverage ratio leaves room for distribution increases later this year, especially if the EBITDA guidance is raised again.
Energy Transfer reports second-quarter earnings in early August. Investors will watch for any further guidance changes or project updates. The combination of accelerating growth, low valuation, and a pipeline of new projects suggests the stock could continue to outperform in the second half of 2026, the article concluded. See also AlphaScala's commodities analysis and crude oil profile for more on energy markets.
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