Energy Transfer LP arrives at the midpoint of May with an unusual combination: a rush of analyst target upgrades on one side, and a meaningful jump in short interest on the other.
The Street has moved quickly in the wake of Q1 results. Five analysts raised price targets in the seven days through May 13, all while maintaining bullish ratings. JP Morgan lifted its target from $22 to $24 while holding Overweight. Scotiabank matched that move, also going to $24. TD Cowen raised to $23 and reiterated Buy. Citigroup and Stifel both lifted targets earlier in the week, with Stifel pushing to $25. The mean consensus target now stands at $23.18 — implying roughly 16% upside from the May 12 close of $20.00. The one dissenting voice on ratings is Morgan Stanley, which downgraded ET to Equal-Weight in December and has since raised its target to $21 while staying on the sidelines. The rest of the Street is firmly in the bull camp.
Short interest tells a more cautious story. Estimated short positions climbed roughly 8% over the past week, reaching about 31.3 million shares. That translates to just under 0.92% of the free float — low in absolute terms, but the weekly increase is the sharpest seen in this data window, unwinding several weeks of stable, lower positioning that followed a prior elevated cluster in early April. The week's move saw shorts add around 2.4 million shares in just a few sessions. Days to cover runs under three, so there is no meaningful squeeze pressure, and availability in the lending market remains loose — availability has not tightened despite the increased borrow demand, and cost to borrow has actually eased sharply, falling from above 6.5% in early May to 2.7% by May 12. That drop in borrow cost, combined with easy availability, suggests the recent short build is tactical rather than conviction-driven.
Options positioning adds little tension to the picture. The put/call ratio is essentially anchored to its 20-day average at 0.16, with a z-score near zero — one of the most neutral readings in the past year, far from the 52-week high of 0.37 seen at the height of broader market stress. Call volume dominates the options market by a wide margin, consistent with the broader analyst bullishness. RSI-14 reads 58.8 — neither overbought nor oversold — while the 21% year-to-date price gain leaves the stock in positive momentum territory.
The fundamental backdrop supports the Street's upgraded targets. Revenue grew 32% year-over-year in the most recent quarter. The EV/EBITDA multiple at roughly 8.5x is moderate for a large-cap midstream operator, and the partnership carries a forward dividend yield close to 7%, with a dividend score ranking in the 89th percentile of the universe — a number that reflects both the yield's size and its consistency. Gathering volumes have grown around 25% since early 2022, underscoring the operational progress that bulls cite. Bears point to the heavy debt load — net debt sits near $70 billion against an EBITDA run-rate that puts leverage at around 3.8x — and the free cash flow compression seen in recent quarters as capital expenditure ramps up.
The institutional picture features one standout: founder and Executive Chairman Kelcy Warren holds over 305 million units, nearly 9% of the partnership, and added 4 million units across four separate purchases in August and November of last year at prices between $16.30 and $17.36. Those purchases are now comfortably in the money, and the contrast with December's cluster of executive sales — the CFO, both Co-CEOs, and several senior officers all sold on December 5 at $16.60 — creates an interesting divergence between the founder's ongoing accumulation and management's tendency to trim. The next scheduled earnings call falls on August 5, which sets the window for any resolution to the current tension between rebuilding shorts and a freshly upgraded consensus.
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