Energy Transfer (ET)

Lower Gas Prices Dampen Energy Transfer Outlook

Energy Transfer (ET) released earnings on Feb. 15, and while the company beat both East Daley and consensus expectations, 2023 guidance came in well below our forecast. We trace the discrepancy to ET’s exposure to falling natural gas prices.

ET guided to 2023 Adj. EBITDA of $12.9-$13.3 billion, well below East Daley’s estimate of $13.4 billion in our company Financial Blueprint. Our forecast was based on our last Blueprint model released mid-January, when the forward Henry Hub price still averaged $4.26/MMBtu for 2023.

Henry Hub futures have fallen sharply in 2023 on a combination of mild winter weather and strong supply growth. As of Feb. 17, the forward curve averaged $2.86/MMBtu for the year, a 33% drop from our mid-January update ahead of the 4Q22 report.