Energy Transfer's Growth Potential: Could Units Hit $30 Soon?
By John Nada·Mar 7, 2026·3 min read
Energy Transfer's stock has surged 13% this year, driven by growth and rising oil prices. Analysts suggest its units could reach $30 within five years.
Energy Transfer's units have surged over 13% this year, nearing $19 each, driven by a growth reacceleration and rising oil prices. This significant uptick reflects the master limited partnership's (MLP) renewed momentum, underpinned by a robust pipeline of expansion projects and an anticipated rise in adjusted earnings exceeding 10% this year.
Last year marked a slower growth period for Energy Transfer, as the company experienced an adjusted EBITDA increase of just 3.2%. This was considerably lower than the historical performance of the MLP, which had averaged a compound annual growth rate of 10% from 2020 through 2024. The subdued growth can be attributed to a combination of factors, including a lack of acquisitions, the completion of only a few expansion projects, and a slump in oil prices that affected the entire sector. In stark contrast, the current year is shaping up to be a turning point for the company.
Energy Transfer is now poised to benefit significantly from the completion of major expansion initiatives, such as the $2.7 billion Hugh Brinson Pipeline and the $5.6 billion Transwestern Pipeline expansion. These projects are expected to drive substantial earnings growth in the coming years, which is essential for the MLP’s strategy of leveraging its infrastructure to meet increasing demand in the energy sector.
With a substantial backlog of projects secured through 2030, Energy Transfer is well-positioned for sustained double-digit earnings growth. The MLP has not only secured current projects but is also identifying new opportunities, particularly in expanding its gas infrastructure to support the growing demand from data centers and power producers. This proactive approach to growth is indicative of Energy Transfer’s strategic focus on capitalizing on market trends and consumer needs.
Moreover, the company’s financial flexibility plays a crucial role in its growth potential. Energy Transfer has the capacity to fund existing growth projects while also pursuing new opportunities as they arise. This includes the potential for further acquisitions when the right deals present themselves, which could enhance the company's operational scale and efficiency. The MLP's ability to adapt and expand in response to market conditions is vital, especially in a landscape where energy demands are evolving.
The recent rise in oil prices serves as a favorable backdrop for Energy Transfer. Higher oil prices typically lead to increased revenues for midstream operators, as they provide essential transportation and storage services for oil and gas products. The correlation between rising oil prices and the MLP's financial health underscores the importance of monitoring market trends closely.
If Energy Transfer can successfully grow its earnings at an annual rate of 10%, its unit price could theoretically reach $30 within five years, assuming it maintains its current valuation multiple. The current valuation is particularly attractive, as Energy Transfer trades at less than nine times forward earnings, significantly lower than the average multiple of over 11 times within its peer group. This disparity indicates that, should the MLP continue its growth trajectory and see a valuation expansion, reaching the $30 mark could occur even sooner than projected.
The implications of Energy Transfer's growth extend beyond just its unit price. As one of the significant players in the MLP market, the company's performance can influence investor sentiment and the broader energy sector. A strong rebound in Energy Transfer's growth could instill confidence among investors, potentially leading to increased interest in other MLPs and energy investments. The interconnected nature of the energy market means that developments within Energy Transfer will be closely watched by both analysts and investors alike.