Energy Transfer Earnings: AI Opportunities Coming to the Forefront

Energy Transfer's second-quarter earnings met our expectations. After updating our model, we will leave our $21 fair value estimate and no-moat rating unchanged. Post-WTG deal, Energy Transfer raised its 2024 EBITDA forecast to a midpoint of $15.4 billion, matching our forecast. Management increased growth capital spending another $200 million to $3.1 billion, factoring in the increased opportunities from the recently closed WTG and Crestwood deals. With the deals, we now anticipate $3 billion in annual growth spending will be the new minimum baseline for the partnership. With the heavy dose of mergers and acquisitions, quarterly EBITDA increased to $3.76 billion, up 21% from last year's levels because of the new volumes and fees added.