Midstream energy company Energy Transfer (NYSE:ET) is scheduled to announce its earnings for the fourth quarter of 2022 after the market closes on Wednesday, February 15. The master limited partnership’s (MLP) third-quarter revenue and earnings lagged expectations despite a strong rise in both the metrics due to a favorable energy market.
Analysts’ Estimates for Energy Transfer’s Q4 Earnings
Energy Transfer shares rallied 44% in 2022. Shares have advanced 9.1% since the start of this year. A strong demand backdrop for crude oil, natural gas, and natural gas liquids helped drive a 45% year-over-year rise in the company’s Q3 2022 earnings per share (EPS) to $0.29. Revenue increased 38% to $22.9 billion, with the company experiencing higher volumes across its five core segments. However, analysts expected EPS of $0.38 on revenue of $24.8 billion.
Strong earnings helped the company boost its quarterly cash distributions. Last month, the company announced a quarterly cash distribution of $0.305 per common unit ($1.22 on an annualized basis) for Q4 2022, to be paid on February 21, 2023, to unit holders of record as of February 7, 2023. The latest distribution per unit reflected a 75% year-over-year increase and a 15% rise over Q3 2022.
Coming to Q4 expectations, analysts project Q4 EPS to rise more than 34% year-over-year to $0.39. Further, they expect revenue to increase over 29% to $24.2 billion.
Is Energy Transfer a Good Stock to Buy Now?
Wall Street is highly bullish about Energy Transfer, with a Strong Buy consensus rating backed by five unanimous Buys. At $16.60, the average ET stock price target implies 28.2% upside potential from current levels. Based on the cash distributions made over the past four quarters, Energy Transfer’s dividend yield stands at 6.7%.
Wall Street is very optimistic about Energy Transfer stock and sees further upside even after a stellar rally last year. Investors will be paying attention to management’s commentary to learn whether the company expects to deliver strong earnings this year, supporting a further rise in its cash distributions.