Can Organic Asset Expansion Fuel Energy Transfer's Long-Term Growth?

Energy Transfer LP ET is expanding its organic asset base to meet increasing pipeline and storage requirements across the United States. With demand increasing for pipeline capacity, natural gas transportation and export capabilities, the company is prioritizing the development and optimization of its existing infrastructure. This organic growth approach, rooted in leveraging its extensive network of pipelines and terminals, positions Energy Transfer for stable and scalable long-term expansion.The firm is planning to invest nearly $5 billion in 2025 in growth capital projects to further expand its organic asset base. Permian Processing expansions, Nederland Flexport NGL expansion, Lone Star Express expansion and Nederland refrigerated storage expansion are a few of the planned projects of Energy Transfer.By focusing on organic asset development, Energy Transfer ensures cost-effective execution with lower regulatory and integration risks compared with acquisitions. Expanding existing pipelines, constructing new connections within its system and investing in additional processing and storage facilities allow the firm to meet rising volumes from key producing regions like the Permian Basin.The firm is also expanding export terminals to enhance its access to international markets while diversifying revenue streams. ET’s ability to scale operations organically also provides a buffer against market volatility and enhances system reliability.Energy Transfer’s commitment to expanding organic assets supports strong cash flow generation and reinforces the strategy of delivering stable distributions, positioning it as a resilient long-term investment in the midstream sector.How Organic Expansion Acts as a Tailwind for Midstream Firms?Organic asset expansion allows midstream firms to increase throughput capacity, improve operational efficiency and generate stable, fee-based revenues. It reduces execution risk, supports scalable growth and strengthens long-term cash flow without the complexities of large-scale acquisitions.Firms like Enterprise Products Partners EPD and The Williams Companies WMB have significantly benefited from organic asset expansion. Enterprise Products has enhanced its Gulf Coast footprint through pipeline and export terminal upgrades, boosting NGL and petrochemical volumes. Williams Companies has expanded its Transco pipeline system to meet growing natural gas demand, securing long-term contracts and driving consistent cash flow. These targeted expansions enable both firms to capitalize on infrastructure synergies and support steady distributable growth.ET’s Price PerformanceUnits of Energy Transfer have risen 5.6% in the past year compared with the Zacks Oil and Gas - Production Pipeline - MLB industry’s growth of 3.3%.Image Source: Zacks Investment ResearchET’s Units Are Trading at a DiscountEnergy Transfer units are somewhat inexpensive relative to the industry. ET’s current trailing 12-month Enterprise Value/Earnings before Interest, Tax, Depreciation and Amortization (EV/EBITDA) TTM is 10.09X compared with the industry average of 11.43X. This indicates that the firm is presently undervalued compared with its industry. Image Source: Zacks Investment ResearchET’s Earnings Estimates Moving UpThe Zacks Consensus Estimate for Energy Transfer’s 2025 and 2026 earnings per unit indicates a year-over-year increase of 10.16% and 10.64%, respectively.Image Source: Zacks Investment ResearchET’s Zacks RankEnergy Transfer currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Williams Companies, Inc. (The) (WMB): Free Stock Analysis Report Enterprise Products Partners L.P. (EPD): Free Stock Analysis Report Energy Transfer LP (ET): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks