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UBS reiterated its buy rating and $277.00 price target on Cheniere Energy (NYSE:LNG) Monday, citing the company’s expansion plans and shareholder return strategy. The stock, currently trading at $237.40, has delivered an impressive 52% return over the past year. According to InvestingPro data, analyst targets range from $230 to $282, with a strong consensus recommendation of 1.65 (Buy).
The investment firm highlighted Cheniere’s SPL expansion project, which aims to increase capacity by approximately 20 mtpa through three liquefaction trains of about 6 mtpa each, plus de-bottlenecking opportunities. UBS estimates the total project cost will range between $15 billion and $18 billion. For the $52.68 billion market cap company, which generated $7.15 billion in EBITDA over the last twelve months, this represents a significant investment in future growth.
Cheniere is focusing on debt reduction within the CQP complex during 2025 to prepare for financing the SPL expansion project, with $300 million already paid down in the first quarter of 2025. The company continues to prioritize shareholder returns while funding its Stage 3 project and preparing Midscale 8 and 9 for final investment decision. InvestingPro analysis shows the company maintains a "GOOD" overall financial health score, with particularly strong marks in profitability metrics.
The energy company still has approximately $3.5 billion remaining under its share buyback authorization, working toward its goal of $4 billion in repurchases by 2027. According to UBS, management expects to complete the authorized buybacks ahead of schedule.
The SPL expansion is proposed in two stages that could potentially be constructed simultaneously, representing a significant capacity increase for the liquefied natural gas producer.
In other recent news, Cheniere Energy reported its first-quarter 2025 earnings, revealing an earnings per share (EPS) of $1.57, which fell short of the projected $2.72. However, the company exceeded revenue expectations, reporting $5.44 billion against the anticipated $4.69 billion. In addition, Cheniere Energy has secured a 15-year agreement with a Canadian firm to purchase natural gas, starting in 2030, contingent upon the final investment decision on the Sabine Pass Liquefaction Expansion Project. Analyst firms Bernstein and RBC Capital have shown confidence in Cheniere Energy, with Bernstein raising its price target to $266.00, citing a positive outlook on the liquefied natural gas (LNG) market. RBC Capital also reiterated its Outperform rating and maintained a price target of $281.00, highlighting the company’s strong position in the U.S. LNG export market. Cheniere Energy’s long-term growth prospects are supported by its Corpus Christi Stage 3 project and potential expansion at the Sabine Pass facility. The company continues to focus on shareholder returns and infrastructure expansion, reinforcing its strategic position in the energy sector.
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