Selling Energy Transfer stock on Q4 earnings miss may be a mistake

Energy Transfer (NYSE: ET) is in the “red” this morning after the energy infrastructure firm reported market-beating revenue but came in shy of earnings estimates in its fiscal Q4.

While the midstream giant’s revenue soared nearly 30% in the fourth quarter to $25.32 billion, its bottom-line at 25 cents a share fell short of 34 cents consensus.

However, this post-earnings dip in Energy Transfer stock is hardly a sign of fundamental weakness.

In fact, savvy investors should consider loading up on ET today, given the pullback ignores a suite of bullish catalysts that position it well for significant gains through the remainder of 2026.

Should you buy the post-earnings dip in Energy Transfer stock?

Beyond near-term volatility, ET stock appears rather “attractive” due to the company’s aggressive push into the power-hungry world of data centers.

Energy Transfer has already started delivering natural gas to a massive Oracle data center campus in Texas – the first of multiple long-term deals expected to flow nearly 900 million cubic feet of gas per day.

ET has suspended its capital-intensive Lake Charles project – reallocating billions to “high-return” pipeline expansion like the upsized $5.6 billion Desert Southwest initiative – positioning itself to benefit from the booming energy needs of Arizona and New Mexico.

This pivot into data center infrastructure transforms Energy Transfer from a traditional utility play into a critical backbone of the artificial intelligence (AI) revolution, a tailwind “far more valuable” than a one-quarter earnings miss.

Raised guidance warrants buying ET shares today

Operationally, Energy Transfer is firing on all cylinders – despite the Q4 earnings miss – hitting all-time partnership records for NGL fractionation and crude oil transportation volumes in the quarter.

These internal metrics demonstrate that the “toll-booth” model of their 130,000-mile network is seeing more traffic than ever before.

Reflecting this strength, management raised its 2026 guidance today, now calling for up to $17.85 billion in adjusted EBITDA.

With a historically attractive price-to-sales multiple of “0.81” only, and a list of expansion projects slated to ramp up late this year, Energy Transfer shares’ post-earnings dip actually feels more like a temporary disconnect.

Investors who focus on long-term cash flow trajectory rather than the quarterly EPS noise should, therefore, treat the pullback as a gift.

Energy Transfer is a high-yield investment

While high-yielding investments often carry high risk, Energy Transfer has built a financial fortress that stands as the strongest in its history.

ET shares currently yield an exciting 7.32%, with a management team committed to growing this annual distribution by up to 5%.

Over the last three years, the energy infrastructure firm has distributed only about 50% of its annual cash flows (90% of which are stable and fee-based), enabling it to retain billions for organic growth while maintaining a leverage ratio within its healthy 4.0-4.5x target.

With over $5 billion in growth capital being deployed this year and the massive “Transwestern” expansion project on the horizon for 2029, the partnership has more than enough “fuel” to keep raising its payout.

This combination of a rock-solid balance sheet and disciplined spending makes ET a rare breed: a high-yield play with a low-risk profile.