Thursday - Stifel has raised its price target on Energy Transfer (NYSE:ET) shares to $19.00 from $18.00, while reiterating a Buy rating on the stock.
The adjustment follows Energy Transfer's first-quarter 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) of $3.88 billion, which surpassed both the Street consensus of $3.70 billion and Stifel's own estimate of $3.65 billion.
Energy Transfer's management has revised its full-year 2024 guidance upward, largely due to the acquisition of NS by SUN. The company is experiencing additional growth opportunities, prompting an increase in its 2024 capital expenditure (capex) guidance to $2.9 billion.
This figure is at the higher end of their long-term forecast, and further increases in capex are anticipated, potentially exceeding $3.0 billion in the second quarter of 2024.
The firm's analysts highlighted Energy Transfer's optimistic outlook on the sustained demand for natural gas, driven in part by the liquefied natural gas (LNG) market and power consumption by artificial intelligence and data centers.
The report underlines the company's potential to continue generating significant free cash flow (FCF) despite the projected rise in growth capex.
The updated price target of $19.00 is based on projections for the year 2025, as Stifel maintains confidence in Energy Transfer's financial narrative and future performance.
InvestingPro Insights
Following Stifel's positive outlook on Energy Transfer, InvestingPro data provides a snapshot of the company's current financial health. With a market capitalization of $54.73 billion and a P/E ratio that has adjusted to 14.3 in the last twelve months as of Q4 2023, Energy Transfer appears to be a robust player in its industry. The company's dividend yield stands at an attractive 7.82%, reflecting a commitment to returning value to shareholders, as evidenced by its 19-year streak of maintained dividend payments, an InvestingPro Tip worth noting for income-focused investors.
Additionally, Energy Transfer's stock is trading near its 52-week high, at 99.88% of this peak, signaling strong market confidence. This is complemented by a notable 27.62% price uptick over the last six months, aligning with the company's positive momentum highlighted by Stifel. For investors seeking further insights, InvestingPro offers additional tips on Energy Transfer, which can be accessed at https://www.investing.com/pro/ET. Those interested can also benefit from an exclusive offer using coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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