Japan returns to long-term LNG deals on AI boom, national energy plan
Written by Emily J. Thompson, Senior Investment Analyst
0mins
Should l Buy ET?
Source: Newsfilter
Japan's LNG Demand Forecast: Japan's LNG demand may rise to 74 million tons by 2040 if decarbonization technologies lag, despite a government plan projecting a decrease to between 53 and 61 million tons. The growth of data centers and the need for reliable energy sources are driving renewed interest in long-term LNG contracts.
Market Dynamics and Future Deals: Japanese utilities are actively pursuing long-term LNG supply agreements amid rising energy costs and uncertainty surrounding carbon neutrality goals. Recent deals include partnerships with U.S. suppliers and ongoing negotiations for additional supplies from Qatar, reflecting a shift back to LNG as a transition fuel.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy ET?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on ET
Wall Street analysts forecast ET stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ET is 20.65 USD with a low forecast of 17.00 USD and a high forecast of 23.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Analyst Rating
7 Buy
4 Hold
0 Sell
Moderate Buy
Current: 17.940
Low
17.00
Averages
20.65
High
23.00
Current: 17.940
Low
17.00
Averages
20.65
High
23.00
About ET
Energy Transfer LP owns and operates a diversified portfolios of energy assets in the United States, with more than 140,000 miles of pipeline and associated energy infrastructure. The Company’s strategic network spans 44 states with assets in all of the major United States production basins. Its core operations include complementary natural gas midstream, intrastate and interstate transportation and storage assets; crude oil, natural gas liquids (NGL) and refined product transportation and terminalling assets; and NGL fractionation. The Company’s segments include intrastate transportation and storage, interstate transportation and storage, midstream, NGL and refined products transportation and services, crude oil transportation and services, investment in Sunoco LP, investment in USA Compression Partners, LP (USAC), and all other. It also owns Lake Charles LNG Company, LLC, its wholly owned subsidiary, which owns an LNG import terminal and regasification facility.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Energy Transfer's Strong Financial Position Supports Income Growth
- High Yield Distribution: Energy Transfer currently offers a yield of 7.5%, significantly higher than the S&P 500's 1.2%, enabling investors to achieve their financial freedom target of $84,000 annually with a lower investment.
- Stable Cash Flow: Approximately 90% of the company's cash flow is derived from long-term contracts and government-regulated rates, ensuring its financial position is the strongest in its history, with distributions accounting for just over half of stable cash flow, allowing for reinvestment to support future growth.
- Distribution Growth Plan: The company aims to increase its distribution by 3% to 5% annually, having raised it by over 3% in the past 12 months, indicating a commitment to providing returns to investors based on stable cash flow.
- Investment Risk Advisory: While Energy Transfer has a strong financial foundation, relying on a single investment for income needs carries risks, especially given its past distribution cut in 2020, prompting investors to consider its role within a diversified income portfolio.
See More
Analysis of High-Yield Stocks in the Energy Sector
- Energy Transfer's High Yield: Energy Transfer (ET) boasts a 9.2% dividend yield, having cut its distribution in 2020 due to the pandemic, but it has since recovered and plans a 3% to 5% annual growth, with up to $5.5 billion in investments planned by 2026 to support this growth.
- Enterprise's Stability: Enterprise Products Partners (EPD) has increased its distribution for 27 consecutive years, with a distributable cash flow covering its distribution at a comfortable 1.7x, indicating strong financial health and making it suitable for conservative investors.
- Enbridge's Diversification: Enbridge (ENB) offers a lower yield of 5.35% but has a diversified business model that includes regulated natural gas utilities and clean energy assets, appealing to investors concerned about the global energy transition.
- Investor Choices: Among these three companies, Energy Transfer is suited for aggressive investors, Enterprise Products is ideal for most income-focused investors, while Enbridge provides a diversified option for those worried about the ongoing global energy shift.
See More
Analysis of High-Yield Stocks in Energy Sector
- Energy Transfer Yield: Energy Transfer offers a 7.2% yield and plans for annual distribution growth of 3% to 5% by 2026; despite cutting its distribution in half during the pandemic in 2020, it has since recovered and surpassed pre-cut levels, indicating improved financial health and future growth potential.
- Enterprise Products Stability: Enterprise Products has increased its distribution for 27 consecutive years, currently yielding 6.2%, with a distributable cash flow covering its distribution by 1.7 times, showcasing financial robustness that appeals to conservative investors, with future growth expected to align with Energy Transfer.
- Enbridge Diversification: Enbridge offers a 5.6% yield and operates beyond the midstream sector, including regulated natural gas utilities and clean energy assets, positioning itself to adapt to changing global energy demands, making it suitable for investors focused on clean energy.
- Investment Recommendations: While Energy Transfer's high yield is attractive, its past distribution cut makes it suitable for aggressive investors; Enterprise Products is ideal for most income investors due to its stability, while Enbridge appeals to those concerned about the global energy transition due to its diversified business model.
See More
Energy Transfer Seen as Key to Financial Freedom
- Passive Income Target: According to The Motley Fool, the average retiree under 65 needs about $84,000 annually in passive income to cover expenses and achieve financial freedom.
- Investment Yield Comparison: Energy Transfer (ET) currently offers a 7.5% yield, significantly higher than the S&P 500's 1.2%, making it an attractive option for investors seeking income.
- Investment Requirement Analysis: To generate $84,000 in passive income from Energy Transfer, investors would need to own 62,687 units, translating to an investment of approximately $1.1 million at the current unit price of $18.
- Financial Stability: Energy Transfer is in its strongest financial position ever, with about 90% of its cash flow derived from long-term contracts and government-regulated rates, and it expects to increase its distribution by 3% to 5% annually.
See More
Valuation Analysis of Energy Transfer Stock
- Stock Performance: Energy Transfer's stock closed at $17.94, with a 5.8% return over the past 30 days and an 8.1% year-to-date return, yet it has declined by 2.8% over the past year, reflecting a complex sentiment in the market.
- Discounted Cash Flow Analysis: The discounted cash flow model suggests an intrinsic value of approximately $41.01 per share for Energy Transfer, indicating a 56.3% discount to the current stock price, which may attract value investors looking for undervalued opportunities.
- P/E Ratio Comparison: Energy Transfer's P/E ratio stands at 14.28x, close to the oil and gas industry average of 14.13x but below the peer group average of 20.32x, indicating a cautious market outlook on its future growth potential, which could influence investor decisions.
- Investor Narrative Tool: Simply Wall St's narrative tool allows investors to construct their investment stories about Energy Transfer, enabling them to understand the gap between stock price and intrinsic value through various assumptions and financial forecasts, thus facilitating more informed investment decisions.
See More
Energy Transfer's 2026 Outlook Shows Optimism
- Strong Price Surge: Energy Transfer kicked off 2026 with a remarkable 11.9% unit price increase in January, significantly outperforming the S&P 500's 1.4% gain, reflecting market confidence in its growth prospects.
- Oil Price Boost: The WTI oil price surged 14% in January due to potential supply issues in Venezuela and Iran, which, while 90% of Energy Transfer's earnings are fee-based, still positively impacts 5% to 10% of its earnings, enhancing future growth potential.
- 2026 Earnings Outlook: The company anticipates adjusted EBITDA between $17.3 billion and $17.7 billion for 2026, representing a growth rate of 7.5% to 10% from last year's $16.1 billion, indicating an acceleration in growth driven by several expansion projects.
- Increased Capital Investment: Energy Transfer plans to invest between $5 billion and $5.5 billion in growth capital projects in 2026, primarily to enhance its gas pipeline network, up from $4.6 billion last year, supporting the rising power demand from AI data centers and further driving distribution growth.
See More
Energy Transfer's Strong Financial Position Supports Income Growth
- High Yield Distribution: Energy Transfer currently offers a yield of 7.5%, significantly higher than the S&P 500's 1.2%, enabling investors to achieve their financial freedom target of $84,000 annually with a lower investment.
- Stable Cash Flow: Approximately 90% of the company's cash flow is derived from long-term contracts and government-regulated rates, ensuring its financial position is the strongest in its history, with distributions accounting for just over half of stable cash flow, allowing for reinvestment to support future growth.
- Distribution Growth Plan: The company aims to increase its distribution by 3% to 5% annually, having raised it by over 3% in the past 12 months, indicating a commitment to providing returns to investors based on stable cash flow.
- Investment Risk Advisory: While Energy Transfer has a strong financial foundation, relying on a single investment for income needs carries risks, especially given its past distribution cut in 2020, prompting investors to consider its role within a diversified income portfolio.
See More
Analysis of High-Yield Stocks in the Energy Sector
- Energy Transfer's High Yield: Energy Transfer (ET) boasts a 9.2% dividend yield, having cut its distribution in 2020 due to the pandemic, but it has since recovered and plans a 3% to 5% annual growth, with up to $5.5 billion in investments planned by 2026 to support this growth.
- Enterprise's Stability: Enterprise Products Partners (EPD) has increased its distribution for 27 consecutive years, with a distributable cash flow covering its distribution at a comfortable 1.7x, indicating strong financial health and making it suitable for conservative investors.
- Enbridge's Diversification: Enbridge (ENB) offers a lower yield of 5.35% but has a diversified business model that includes regulated natural gas utilities and clean energy assets, appealing to investors concerned about the global energy transition.
- Investor Choices: Among these three companies, Energy Transfer is suited for aggressive investors, Enterprise Products is ideal for most income-focused investors, while Enbridge provides a diversified option for those worried about the ongoing global energy shift.
See More
Analysis of High-Yield Stocks in Energy Sector
- Energy Transfer Yield: Energy Transfer offers a 7.2% yield and plans for annual distribution growth of 3% to 5% by 2026; despite cutting its distribution in half during the pandemic in 2020, it has since recovered and surpassed pre-cut levels, indicating improved financial health and future growth potential.
- Enterprise Products Stability: Enterprise Products has increased its distribution for 27 consecutive years, currently yielding 6.2%, with a distributable cash flow covering its distribution by 1.7 times, showcasing financial robustness that appeals to conservative investors, with future growth expected to align with Energy Transfer.
- Enbridge Diversification: Enbridge offers a 5.6% yield and operates beyond the midstream sector, including regulated natural gas utilities and clean energy assets, positioning itself to adapt to changing global energy demands, making it suitable for investors focused on clean energy.
- Investment Recommendations: While Energy Transfer's high yield is attractive, its past distribution cut makes it suitable for aggressive investors; Enterprise Products is ideal for most income investors due to its stability, while Enbridge appeals to those concerned about the global energy transition due to its diversified business model.
See More
Energy Transfer Seen as Key to Financial Freedom
- Passive Income Target: According to The Motley Fool, the average retiree under 65 needs about $84,000 annually in passive income to cover expenses and achieve financial freedom.
- Investment Yield Comparison: Energy Transfer (ET) currently offers a 7.5% yield, significantly higher than the S&P 500's 1.2%, making it an attractive option for investors seeking income.
- Investment Requirement Analysis: To generate $84,000 in passive income from Energy Transfer, investors would need to own 62,687 units, translating to an investment of approximately $1.1 million at the current unit price of $18.
- Financial Stability: Energy Transfer is in its strongest financial position ever, with about 90% of its cash flow derived from long-term contracts and government-regulated rates, and it expects to increase its distribution by 3% to 5% annually.
See More
Valuation Analysis of Energy Transfer Stock
- Stock Performance: Energy Transfer's stock closed at $17.94, with a 5.8% return over the past 30 days and an 8.1% year-to-date return, yet it has declined by 2.8% over the past year, reflecting a complex sentiment in the market.
- Discounted Cash Flow Analysis: The discounted cash flow model suggests an intrinsic value of approximately $41.01 per share for Energy Transfer, indicating a 56.3% discount to the current stock price, which may attract value investors looking for undervalued opportunities.
- P/E Ratio Comparison: Energy Transfer's P/E ratio stands at 14.28x, close to the oil and gas industry average of 14.13x but below the peer group average of 20.32x, indicating a cautious market outlook on its future growth potential, which could influence investor decisions.
- Investor Narrative Tool: Simply Wall St's narrative tool allows investors to construct their investment stories about Energy Transfer, enabling them to understand the gap between stock price and intrinsic value through various assumptions and financial forecasts, thus facilitating more informed investment decisions.
See More
Energy Transfer's 2026 Outlook Shows Optimism
- Strong Price Surge: Energy Transfer kicked off 2026 with a remarkable 11.9% unit price increase in January, significantly outperforming the S&P 500's 1.4% gain, reflecting market confidence in its growth prospects.
- Oil Price Boost: The WTI oil price surged 14% in January due to potential supply issues in Venezuela and Iran, which, while 90% of Energy Transfer's earnings are fee-based, still positively impacts 5% to 10% of its earnings, enhancing future growth potential.
- 2026 Earnings Outlook: The company anticipates adjusted EBITDA between $17.3 billion and $17.7 billion for 2026, representing a growth rate of 7.5% to 10% from last year's $16.1 billion, indicating an acceleration in growth driven by several expansion projects.
- Increased Capital Investment: Energy Transfer plans to invest between $5 billion and $5.5 billion in growth capital projects in 2026, primarily to enhance its gas pipeline network, up from $4.6 billion last year, supporting the rising power demand from AI data centers and further driving distribution growth.
See More
