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On Tuesday, JPMorgan analyst reiterated a Neutral rating and a $194.00 price target for Chart Industries (NYSE:GTLS), which currently trades at $144.36. According to InvestingPro analysis, the company appears undervalued based on its Fair Value estimate, with analysts’ targets ranging from $165 to $275. The firm expects Chart Industries to see a significant increase in cash flow, particularly in the second half of 2025, driven by the Big LNG order from Woodside (OTC:WOPEY) Phase 1, valued at approximately $300 million. The order is projected to positively impact the company’s operating results, building on the company’s impressive 24.1% revenue growth over the last twelve months.
Chart Industries has secured roughly $150 million in commitments after booking the Woodside LNG Phase 2 order, which will be included in the first quarter orders. Additionally, the company has announced a $300 million international helium project and approximately $150 million of hydrogen-related projects within the $2 billion of customer commitments. The demand for Nitrogen Recovery Units (NRUs) is also strong, with Chart Industries recently selected to provide NRUs and helium process technology for the Dry Piney Helium and Carbon Sequestration Project in Wyoming. The company anticipates a 6% compound annual growth rate in NRU demand through 2033.
Despite the potential challenges posed by tariffs, management has indicated that Chart Industries is better positioned now than during President Trump’s first term. This is due to the flexibility of its manufacturing strategy and changes to the pricing mechanism on its long-term agreements (LTAs), which had previously put pressure on margins.
JPMorgan updated its model for Chart Industries, forecasting 2025 revenues of $4.66 billion, which aligns with the consensus estimate of $4.67 billion and is at the lower end of the company’s guidance range of $4.65 to $4.85 billion. The firm also anticipates 2025 EBITDA and free cash flow (FCF) of $1,136 million and $511 million, respectively. These figures are in comparison to the consensus estimate of $1,169 million for EBITDA and $506 million for FCF, and the midpoint of the company’s guidance at $1,200 million for EBITDA and $575 million for FCF. InvestingPro data reveals the company’s strong financial health with a perfect Piotroski Score of 9, suggesting robust operational efficiency. Subscribers can access 12 additional ProTips and a comprehensive Pro Research Report for deeper insights into Chart Industries’ financial outlook.
The company, which had previously announced a $250 million buyback authorization, remains committed to reducing its debt. Chart Industries will not engage in substantial cash acquisitions or buybacks until its leverage ratio falls below 2.5x, a milestone the company expects to reach within the year. Currently maintaining a current ratio of 1.38 and generating strong free cash flow with a yield of 6%, the company appears well-positioned to achieve its debt reduction goals despite recent market volatility that has led to a 10.51% decline in share price over the past week.
In other recent news, Chart Industries reported its Q4 2024 earnings, revealing a shortfall in both earnings per share (EPS) and revenue compared to forecasts. The company’s EPS was $2.66, missing the projected $3.15, while revenue was $1.11 billion, below the anticipated $1.18 billion. Despite this, Chart Industries maintains its 2025 growth outlook, highlighting strong growth in LNG, hydrogen, and carbon capture markets. Moody’s Ratings recently upgraded Chart Industries’ ratings, citing strong backlog and order growth, which is expected to support revenue growth of about 9% in 2025. The company’s liquidity remains robust, with a positive outlook from Moody’s, projecting approximately $1 billion in cumulative free cash flow over the next two years. In another development, Chart Industries has been selected by Blue Spruce Operating LLC to supply technology for the Dry Piney Helium and Carbon Sequestration Project in Wyoming. Stifel analysts reiterated a Buy rating on Chart Industries, maintaining a price target of $231, citing strong order flow and better-than-expected free cash flow.
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