Goldman Sachs cuts Venture Global price target to $20 from $29

On Friday, Goldman Sachs adjusted its outlook on Venture Global (NYSE:VG) shares, reducing the price target to $20.00 from the previous $29.00, while maintaining a Buy rating on the stock. The revision follows the company’s fourth-quarter results for 2024, which did not meet expectations, leading to a significant drop in the stock’s value. Venture Global’s shares saw a 36% decline, a stark contrast to the broader American markets and the S&P 500 index, which both fell by only 2%.

The analyst from Goldman Sachs noted that despite the disappointing quarterly performance and the subdued 2025 guidance, there were still positive aspects to Venture Global’s report. The company’s Plaquemines facility showed impressive progress in terms of both the speed of its ramp-up and utilization levels. According to InvestingPro data, the company maintains a healthy gross profit margin of 61% and has remained profitable over the last twelve months, though it’s currently burning through cash rapidly. Additionally, there was optimism about the economics of the brownfield expansion at Plaquemines and the company’s intent to increase overall contracting levels, which could help with cash flow volatility and support their strategy for market share growth.

However, the softer guidance for 2025 has raised concerns about the company’s ability to capitalize on global gas margins and its ongoing development expenses. InvestingPro analysis reveals several challenges, including a significant debt burden of $29.8 billion and negative free cash flow. The details about the returns on future growth projects and funding strategies were also less clear, contributing to the uncertainty surrounding the stock. For deeper insights into Venture Global’s financial health and future prospects, investors can access the comprehensive Pro Research Report, which provides expert analysis of key metrics and growth drivers.

The revised estimates from Goldman Sachs reflect several factors, including lower spread capture assumptions for 2025 and slightly for 2026, increased ongoing development expenses, a delay in CP3/Delta offset by the timing of the Plaquemines expansion, and minor adjustments to funding assumptions. Furthermore, the price target adjustment to $20 is also due to a widened equity discount rate in the firm’s discounted cash flow analysis, now at 12% up from 11.25%, reflecting the increased execution risk.

Goldman Sachs acknowledges the current value in Venture Global’s stock despite the potential for ongoing market volatility as investors seek a clearer path forward for the company.

In other recent news, Venture Global Inc . reported its fourth-quarter 2024 earnings, revealing a significant decline in revenue to $1.5 billion, a 737% decrease from the previous year. However, the company saw a notable increase in net income, which surged to $871 million. Despite the revenue drop, the company continues to expand its LNG production capabilities, with several projects underway. Looking ahead, Venture Global has set a consolidated adjusted EBITDA guidance of $6.8 to $7.4 billion for 2025. The company plans to export between 140 to 148 cargos from its Capshoe Pass facility and is progressing with the Plaquemines Phase III expansion. In terms of analyst actions, Scotiabank (TSX:BNS) revised its price target for Venture Global shares to $15, down from $17, while maintaining a Sector Perform rating. Analyst Brandon Bingham expressed concerns over the company’s first-quarter performance as a publicly traded entity, noting that the fourth-quarter results of 2024 fell short of expectations. Despite these developments, Venture Global’s strategic operations and future outlook remain strong.

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