Energy Transfer Earnings: Growth Remains Front and Center While Lake Charles LNG Is Stalled

Energy Transfer’s second-quarter results met our expectations, and the partnership reaffirmed the midpoint of its 2023 EBITDA at $13.3 billion, matching our expectations. After updating our model, we will maintain our $17.50 fair value estimate and no-moat rating. Second-quarter EBITDA fell to $3.1 billion from $3.2 billion last year. Volume growth across its portfolio was more than offset by weaker gas and natural gas liquids pricing, which were down 70% and 45%, respectively, from last year’s levels. Energy Transfer remains more exposed than most within our U.S. midstream coverage to oil and gas price volatility given its propensity to rely on marketing spreads for earnings, so we would expect more of the same in the second half of 2023.