Energy Transfer stock initiated with Buy rating at TD Cowen on natural gas exposure

Investing.com - TD Cowen has initiated coverage on Energy Transfer (NYSE:ET) with a Buy rating and a price target of $22.00 on Monday. The company, currently valued at $61.67 billion, has been delivering strong returns to shareholders with a notable 7.29% dividend yield.

The research firm highlighted Energy Transfer’s diversified operations and publicly traded subsidiaries, noting that while these factors make the company "less straightforward to analyze than peers," they also provide strategic advantages. InvestingPro analysis shows the company maintains a GOOD financial health score, with particularly strong profit metrics.

TD Cowen emphasized that Energy Transfer generates 45% of its EBITDA from natural gas operations and maintains connectivity to most major natural gas basins, positioning the company to benefit from sector tailwinds.

The firm believes Energy Transfer is currently trading at "undemanding levels," suggesting potential value for investors at current price points.

Additional upside potential exists if Energy Transfer sanctions its Lake Charles LNG project and expands its data center supply initiatives, according to TD Cowen’s analysis.

In other recent news, Energy Transfer reported its first-quarter 2025 financial results, revealing a net income of $1.32 billion, an increase from $1.24 billion in the same period last year. However, the company’s revenue of $21.02 billion fell short of the consensus estimate of $22.42 billion, though earnings per share met expectations at $0.36. The company also announced a quarterly cash distribution increase of over 3% compared to the first quarter of 2024. Energy Transfer’s Adjusted EBITDA rose to $4.1 billion from $3.9 billion year-over-year, with significant growth in the Midstream segment. Additionally, Energy Transfer and Enbridge (NYSE:ENB) are planning a pipeline upgrade to boost oil flows, aiming to transport up to 200,000 barrels of crude oil per day to the U.S. Gulf Coast. In regulatory news, the Bureau of Industry and Security rescinded a license requirement for certain ethane exports to China, which affects Energy Transfer’s operations. These developments reflect the company’s ongoing efforts to expand its infrastructure and adapt to market demands.

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