Energy Transfer LP (ET) DCF Valuation
TGM's two-stage DCF values Energy Transfer LP (ET) between $24.63 and $67.38 depending on assumptions, with a base case of $41.08. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use)), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$19.22 is justified only if free cash flow grows about +4.5% a year (fading to 2.5% long-run) at a 7.5% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 12.1%/yr | 8.5% | $24.63 |
| Base case | 15.1%/yr | 7.5% | $41.08 |
| Optimistic | 18.1%/yr | 6.5% | $67.38 |
| Analyst DCF (FMP) | independent reference — different model | $64.32 | |
Current Price
$19.22
Market-Implied Growth
+4.5%/yr
vs +15.1% 5Y actual
Model Scenario Range
$24.63 – $67.38
model output — not a price target
ET DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for ET (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $6.0B · 3.44B shares · net debt $68.7B
Estimated Fair Value
$77.41
+302.8% vs $19.22
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 15.1%/yr FCF growth and 10-year horizon fixed. Green = above today's $19.22; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $116 | $132 | $153 | $182 | $226 |
| 6.5% | $85.16 | $94.20 | $105 | $120 | $139 |
| 7.5% | $64.94 | $70.61 | $77.41 | $85.72 | $96.11 |
| 8.5% | $50.66 | $54.44 | $58.85 | $64.07 | $70.32 |
| 9.5% | $40.08 | $42.72 | $45.74 | $49.22 | $53.28 |
About Energy Transfer LP
Energy Transfer LP functions as a comprehensive provider of energy infrastructure and associated services. The company operates extensive natural gas networks, including approximately 11,600 miles of intrastate transportation pipelines and an additional 19,830 miles dedicated to interstate transport. Its natural gas storage capabilities encompass three facilities in Texas and another two spanning Texas and Oklahoma. Energy Transfer supplies natural gas to a diverse range of customers, such as electric utilities, independent power producers, local distribution companies, other marketing firms, and various industrial end-users. Beyond transportation, the firm manages substantial infrastructure for gathering, processing, treating, and conditioning natural gas and natural gas liquids (NGLs) across a broad geographic area that includes Texas, New Mexico, West Virginia, Pennsylvania, Ohio, Oklahoma, Arkansas, Kansas, and Louisiana. This infrastructure also covers natural gas gathering systems in Ohio, and integrated natural gas gathering, oil pipeline, and oil stabilization facilities situated in South Texas. Additionally, the company provides water transport and supply services to natural gas producers in Pennsylvania. In the NGL sector, Energy Transfer possesses approximately 5,215 miles of NGL pipelines, along with facilities for NGL and propane fractionation. Its NGL storage solutions include facilities with a working capacity of around 50 million barrels (MMBbls), supplemented by additional storage assets and terminals totaling about 17 MMBbls. The company is actively involved in the transportation, terminalling, acquisition, and marketing of crude oil, as well as the distribution of refined petroleum products like gasoline, middle distillates, and motor fuels. Complementing these primary operations, Energy Transfer offers specialized services such as natural gas compression, removal of carbon dioxide and hydrogen sulfide, natural gas cooling, dehydration, and British thermal unit (BTU) management. Furthermore, its operations extend to managing coal and other natural resource properties, selling standing timber, leasing coal-related infrastructure, collecting oil and gas royalties, and generating electrical power. Established in 1996 and headquartered in Dallas, Texas, the company officially adopted its current name, Energy Transfer LP, in October 2018, having previously been known as Energy Transfer Equity, L.P.
- Sector
- Energy
- Industry
- Oil & Gas Midstream
- CEO
- Marshall S. McCrea