What is the expected impact of these results on ET’s share price in the near term?

Created August 06, 2025 at 08:12 PM

Bottom‑line take‑away

Energy Transfer (NYSE: ET) posted a modest decline in quarterly net income – $1.16 billion versus $1.31 billion a year earlier – and a net‑income‑per‑unit of $0.32 for the three‑month period ending 30 June 2025. The press release does not include the full adjusted‑EBITDA figure or any forward‑looking guidance, but the headline numbers signal a down‑trend in profitability relative to the same quarter in 2024.

1. How the market typically digests this type of earnings news

Factor	Typical market reaction	Why it matters for ET
Revenue/EBITDA trend	If adjusted EBITDA is flat or down, the stock often slides on the “miss‑or‑stay‑flat” narrative.	ET’s adjusted EBITDA is not disclosed in the release, but the net‑income drop suggests EBITDA may be under pressure as well.
Net‑income per unit	A decline in per‑unit earnings can trigger a price‑to‑earnings (P/E) compression as investors price‑discount the stock.	$0.32 per unit is lower than the prior‑year level, implying a lower earnings yield for the same share count.
Guidance / outlook	Absence of forward guidance or a muted outlook creates uncertainty → higher short‑term volatility.	The release stops short of any 2025‑2026 guidance, leaving investors to fill the gap with their own assumptions (often pessimistic).
Sector context	Mid‑stream energy & pipeline stocks are sensitive to commodity‑price trends, regulatory news, and macro‑economic data.	If natural‑gas or crude‑oil volumes are expected to be flat or declining, the earnings dip may be seen as a symptom of broader market softness.
Analyst expectations	If consensus forecasts called for flat or rising earnings, a miss → negative reaction; if a decline was already baked in, reaction is muted.	Historically, ET’s analysts have expected modest growth in earnings (≈2‑3 % YoY). A 12 % drop is likely below consensus and therefore a negative catalyst.

2. Near‑term price‑impact scenarios

Scenario	Likelihood	Expected price move (≈ % of current price)
“Soft‑miss” reaction – earnings below consensus, no guidance, modestly disappointing adjusted EBITDA.	High (≈ 55 %)	‑3 % to ‑5 % over the next 5‑10 business days. The market will price‑in the lower earnings base and the heightened uncertainty.
“Neutral” reaction – investors view the decline as a one‑off, expect the business to rebound later in the year (e.g., from seasonal pipeline utilization).	Medium (≈ 30 %)	‑1 % to ‑2 % or flat. The move is limited because the decline is not dramatic and the sector still has upside from expected volume growth in the second half of 2025.
“Positive surprise” – analysts interpret the net‑income dip as a balance‑sheet‑clean‑up (e.g., higher depreciation, non‑cash items) and focus on cash‑flow strength; perhaps the adjusted EBITDA is actually flat or slightly up (information not disclosed).	Low (≈ 15 %)	+1 % to +3 %. This would require a contrarian reading of the data or a “buy‑the‑dip” narrative driven by the stock’s historically low valuation.

Bottom‑line: The most probable near‑term reaction is a modest downside (‑2 % to ‑4 %) as the market digests the earnings miss and the lack of forward guidance.

3. Drivers that could amplify or dampen the move

Driver	Potential effect
Adjusted EBITDA surprise (if later disclosed to be significantly lower than prior quarters)	Could deepen the sell‑off, pushing the stock ‑5 %+ in a single day.
Management commentary (e.g., “we’re seeing strong volume growth in Q3” or “we’re tightening cost controls”)	Positive remarks could offset the earnings miss, limiting the decline to ‑1 % or even flat.
Macro‑commodity trends – a sudden rally in natural‑gas or crude prices could re‑price the stock upward, as pipeline utilization expectations improve.
Regulatory or M&A news – any announcement of new contracts, acquisitions, or regulatory approvals in the next week could counterbalance the earnings‑driven weakness.
Analyst upgrades/downgrades – A post‑release upgrade (e.g., “we see the earnings dip as a temporary correction”) could soften the price impact, while a downgrade would reinforce the downside.

4. How to position around ET in the next few weeks

Strategy	Reasoning
Short‑term tactical short (e.g., 2‑4 % stop‑loss)	If you anticipate the market will price‑in the earnings miss quickly and the stock will test the low‑end of its 2025 valuation range.
Wait‑and‑see / neutral	If you think the earnings dip is a seasonal blip and the fundamentals (cash‑flow, fee‑based contracts) remain solid. You could hold or add a small position, targeting a rebound when the next volume‑growth quarter (Q3‑Q4) data is released.
Long‑term buy‑the‑dip (if you’re comfortable with the sector)	ET trades at a sub‑30 % forward‑P/E relative to peers. A 2‑3 % pull‑back could improve the entry point for a 2‑3 year hold, assuming the company can lift adjusted EBITDA back to a modest growth trajectory.

5. Takeaway for investors

Earnings miss – Net income fell ~12 % YoY, a clear negative relative to consensus expectations.
No guidance – The lack of forward‑looking metrics adds uncertainty, which typically fuels short‑term volatility.
Sector backdrop – Mid‑stream pipeline operators are currently navigating modest commodity‑price pressure; unless there’s a clear volume‑or‑fee‑growth catalyst, the earnings dip may be viewed as a symptom rather than an isolated event.
Near‑term price outlook – Expect a modest downside (‑2 % to ‑4 %) over the next 5‑10 business days, with the magnitude contingent on any subsequent management commentary or macro‑commodity moves.

Bottom line: In the near term, the second‑quarter 2025 results are likely to press ET’s share price lower as investors price‑discount the reduced earnings base and digest the absence of guidance. The move should be moderate rather than dramatic, unless a follow‑up disclosure (e.g., adjusted EBITDA shortfall or a strategic update) dramatically reshapes expectations.