Energy Transfer: Catalysts Fade Into 2020

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About: Energy Transfer LP (ET), Includes: BX, EPD, KMI, MPLX, PAA, SEMG, SNMRY, WMB
by: Michael Boyd
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Michael Boyd
Long/short equity, contrarian, medium-term horizon, mid-cap
Summary

Energy Transfer trades at a deep discount to every large-cap midstream out there. The problem is, everyone knows that.

Heading into 2020, there were a number of catalysts sitting out there: Rover Pipeline sale, lower 2020 capital budget, continued execution and deleveraging.

Many of these aspects have faded. Will the valuation alone be enough to carry the firm to higher prices in 2020? That logic didn't work in 2019.

There is no question that Energy Transfer (ET) remains the cheapest large-cap midstream play by nearly every measure. I know it, you know it, the market knows it. Ironically enough, that is the