Is Energy Transfer LP (ET) overvalued?
On Equity Rank's model estimate, ET trades close to its fair value (6% below it). Energy Transfer LP (ET) last closed at $18.92; the multi-method model fair value is $20.06.
| Price | Model fair value | Price vs model |
|---|---|---|
| $18.92 | $20.06 | 6% below |
What the answer rests on
- 9 of 12 valuation methods put ET's value above its price and 3 put it below, so the methods mostly agree.
- To justify today's price, ET's free cash flow would need to grow about 0.8% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -12.1% a year.
- ET trades at 12.9 times its last year's earnings, against a median of 14.9 for 110 profitable Energy companies.
- Over the past year the price sat below the model fair value on 16% of trading days. The gap ranged from 4% below to 26% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind ET's fair value · What prices assume · Other companies