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Energy Transfer is selling $2.7 billion in senior notes, which are a type of debt that gets paid back before other obligations if a company runs into trouble. The debt is split into three parts that will be paid back in 2032, 2037, and 2057.
For a company that moves about 30 percent of America's oil and gas, managing debt is a constant part of the business. While this is a large amount of money, it is routine for energy infrastructure firms to issue new debt to pay off older loans or fund new pipeline projects. The interest rates it secured suggest that lenders still see the company's massive pipeline network as a safe bet for the long term.
Source: Business Wire
Jefferies set its price target for Energy Transfer at $25. This is slightly lower than the $26 average target from all analysts who follow the stock, but it still implies significant room for the stock to grow from its current level of about $20. Price targets represent where an analyst thinks the stock will be in a year. While these numbers often move up and down with the market, this call reflects a general view that the company's network of pipelines and export terminals is worth more than the market currently pays for it.
Source: Jefferies
Energy Transfer reported net income of 1.21 billion dollars for the third quarter, up from 1.02 billion dollars in the same period last year. This growth reflects the company's ability to earn more from its existing network of pipelines and storage tanks as energy production remains high.
For a long-term owner, the most important part of this result is the stability of the cash coming in. The company operates like a toll-booth, charging fees to move oil and gas regardless of what the market price for those fuels is. These results suggest that its network remains busy and that its recent efforts to control spending are helping more of that revenue reach the bottom line.
Source: Business Wire
Energy Transfer is set to report its latest numbers today. Analysts are looking for about 40 cents in profit per share on roughly 31 billion dollars in revenue. Beyond the numbers, the focus is on how much cash the company is generating from its pipeline network. We are watching for updates on its plan to raise payouts to owners while keeping a lid on spending for new projects.
Oil prices fell about 4 percent on Monday as diplomatic talks eased concerns about supply disruptions in the Middle East. While a drop in oil prices often weighs on the energy sector, this business is largely insulated from these swings. Energy Transfer operates like a toll road, earning fixed fees for moving natural gas and oil through its pipelines regardless of the market price of the fuel itself. About 90 percent of its revenue comes from these steady fees, so as long as production volumes remain high, the company's ability to pay out cash to owners stays intact.
Source: WSJ
Management has a history of missing its own targets, but a recent massive jump in profit suggests the business is finally outrunning its own cautious forecasts.
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