Energy Transfer Earnings: Distribution Payout Growth Is Finally Slowed

Energy Transfer’s first-quarter results were healthy, and its raised full-year forecast is generally in line with ours. The partnership boosted its 2023 EBITDA to a midpoint of $13.25 billion compared with $13.1 billion previously, mainly reflecting the addition of the just-closed Lotus deal. This is essentially in line with our $13.27 billion forecast. Growth capital spending for 2023 was also increased modestly to $2 billion from last quarter’s midpoint guidance of $1.7 billion, again mainly reflecting Lotus, and already incorporated in our model. We expect to maintain our $17.50 per unit fair value estimate and no-moat rating.