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On Thursday, Mizuho (NYSE:MFG) Securities adjusted its financial outlook on Venture Global (NYSE:VG), decreasing the price target to $16.00 from the previous $18.00, while continuing to recommend the stock as Outperform. Currently trading at $9.34, the stock sits well below its 52-week high of $25.50. According to InvestingPro analysis, the stock appears overvalued at current levels. The revision comes ahead of the company’s first quarter 2025 update, which is scheduled for next Tuesday, May 13, with a conference call set for 9 am ET.
Analysts at Mizuho have recalibrated their expectations for Venture Global’s first-quarter performance, anticipating lower realized margins and increased costs stemming from the commissioning of the Calcasieu Pass (CP1) facility and development expenses at the Plaquemines LNG project. The company’s significant debt burden of $30.15 billion and negative free cash flow pose additional challenges. As a result, the adjusted EBITDA estimate for the first quarter has been reduced to $1,332 million, which falls below the consensus estimate of $1,392 million. InvestingPro subscribers can access 14 additional key insights about Venture Global’s financial health and prospects.
The financial firm has also updated its multi-year forecast for Venture Global to better align with the projected unit costs at the company’s underlying projects. This adjustment reflects a more conservative valuation of the company’s marketing margins, which have been affected by macroeconomic uncertainty and a hesitant investor sentiment. Consequently, Mizuho has lowered the target multiple on marketing margins below $3.25 per million British thermal units (mmbtu) from 8.5 times to 6.5 times.
The analyst from Mizuho expressed that the updated price target considers these factors and aligns with the current market conditions that have made investors cautious about Venture Global’s marketing strategy. Despite these challenges, Mizuho continues to see Venture Global as an Outperform-rated investment, suggesting confidence in the company’s long-term potential.
In other recent news, Venture Global reported increased exports of liquefied natural gas (LNG) for the first quarter of 2025, with 34 cargos exported from its Calcasieu Pass facility and 29 from Plaquemines LNG facility. The company achieved a weighted average liquefaction fee of $8.80 per million British thermal units (MMBtu) at Calcasieu Pass and $7.26/MMBtu at Plaquemines. Additionally, Venture Global secured authorization from the U.S. Department of Energy to export LNG to non-free trade agreement countries for its CP2 LNG project in Louisiana. This approval is a significant step for the company’s third LNG venture, which is expected to produce 20 million tons of LNG annually. In terms of analyst ratings, Goldman Sachs maintained a Buy rating on Venture Global’s stock, highlighting operational execution and future growth prospects, while Citi lowered its price target from $18.00 to $11.00, citing anticipated declines in cash flow. The Citi analysts adjusted their EBITDA estimate to $6.9 billion, reflecting changes in commodity price assumptions and development costs. The CP2 project’s approval and ongoing developments underscore Venture Global’s efforts to expand its LNG export capabilities amidst changing regulatory and market conditions.
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