New LNG contract and earnings revision put Venture Global in focus
Venture Global (VG) has drawn fresh attention after a new long term LNG sales deal with ConocoPhillips, alongside an earnings estimate cut that reflects basis differential headwinds.
The new Sales and Purchase Agreement commits ConocoPhillips to buy 1.0 million tonnes per annum of LNG from 2030 for 20 years. RBC Capital Markets has also reduced its Q3 adjusted EBITDA estimate while maintaining a positive view on the stock.
Venture Global shares trade at US$13.16, and the stock has pulled back around 14% on a 1 month share price basis after an 87% year to date share price return. The 1 year total shareholder return of about 40% points to momentum that has cooled but not disappeared.
Scan beyond Venture Global and see how other LNG and energy exporters with fresh contracts or earnings revisions compare on our curated list of 28 high quality undervalued stocks.
Venture Global now trades well below both analyst targets and some estimated fair value models after a sharp pullback. Is that discount compensation for real execution risk, or is caution starting to overshoot the fundamentals?
Most Popular Narrative: 21% Undervalued
Venture Global’s most followed narrative pegs fair value at about $16.67 per share, compared with the last close of $13.16. This places the recent pullback squarely against a framework built around long term LNG build out and contract visibility.
Ongoing brownfield expansions and bolt on phases targeting more than 100 MTPA of total capacity are expected to leverage existing infrastructure and financing platforms, improving capital efficiency and boosting long run return on equity and consolidated EBITDA.
See why 14 investors see Venture Global as 21% undervalued.
Result: Fair Value of $16.67 (UNDERVALUED)
Still, the Venture Global narrative can fray if Calcasieu Pass arbitration outcomes absorb more cash than expected, or if LNG pricing weakens faster than analysts currently model.
Find out about the key risks to this Venture Global narrative.
Next Steps
Mixed signals around Venture Global can feel messy, which is exactly why it helps to cut through the noise, act early, and weigh both sides for yourself with the 4 key rewards and 3 important warning signs.
Looking for more investment ideas beyond Venture Global?
If you only focus on Venture Global, you could miss opportunities sitting in plain sight. Cast a wider net and let well filtered data do some of the heavy lifting for you.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include VG.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
