Rebound Potential for Energy Transfer Partners?
Many energy stocks saw a rough 2011 year. Many analysts are predicting that 2012 will be much better for energy stocks. In this post, we are going to look at Energy Transfer Partners specifically, and explore their potential for rebound in 2012. Dan Caplinger has compiled some great research, check it out!
Will Energy Transfer Partners rise in 2012?
Analysts are giving mixed messages about Energy Transfer Partners. On one hand, their target price of the stock is less than $2 above the current share price. However, they still expect huge earnings growth for the company in 2012. Motley Fool CAPS members weigh in on the optimistic side, giving the company their top rating of five out of five stars.
One challenge the whole industry faces is that the natural gas market can’t seem to catch a break. Both Range Resources (NYSE: RRC ) and Ultra Petroleum (NYSE: UPL ) have gotten off to a horrible start in 2012, as the gas-focused stocks have some of the heaviest exposure to natural gas prices, which have fallen to decade-lows to start off the year. Among pipeline companies, those pressures have led to consolidation in the industry, with combinations aiming to build extensive networks across the continent.
Price weakness doesn’t directly translate to problems for Energy Transfer Partners, though. The company has an agreement with ExxonMobil (NYSE: XOM ) subsidiary XTO Energy to provide processing and transportation for gas in the Barnett and Woodford shale areas. But as Energy Transfer Partners’ recent dispute with Enterprise Products Partners (NYSE:EPD ) over a proposed Cushing-Houston pipeline reveals, deals aren’t a sure thing until they’re done.
If natural gas will ever stabilize, then Energy Transfer Partners could profit in a big way from the increased demand. For now, though, the company may need to tread water in an ultra-competitive market in order to hold its own.
Overall, with this stock, you need to keep up on the events of the natural gas industry. It seems that if natural gas becomes more stable and prices more consistent, ETP could be a great stock pick. Be sure to follow the markets on this one in order to understand if and when to buy.
Quotes taken from report by Dan Caplinger, Read the entire article here.
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