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On Tuesday, Mizuho (NYSE:MFG) Securities adjusted its stance on Venture Global (NYSE:VG) by reducing the company’s price target to $18 from the previous $25, while continuing to recommend the stock with an Outperform rating. The revision follows Venture Global’s fourth-quarter 2024 financial update, which was shared last Thursday and led to a significant 36% drop in the company’s share price. According to InvestingPro data, the stock is now trading near its 52-week low of $8.62, having declined over 62% in the past six months. InvestingPro analysis indicates the stock is currently overvalued despite the recent selloff.
The price target adjustment was primarily due to Venture Global’s adjusted EBITDA guidance for fiscal year 2025, which fell short of expectations by approximately $2 billion. The company’s current EBITDA stands at $2.1 billion, with InvestingPro data showing a high EV/EBITDA multiple of 25.35x. Despite the sharp decline in share value, Mizuho analysts, led by Robert Mosca, expressed the view that the market’s reaction might have been excessively harsh, penalizing Venture Global for challenges in a business segment known for its volatility—specifically, the merchant marketing of commissioning cargos. InvestingPro subscribers have access to 14 additional key insights about Venture Global’s financial health and valuation metrics.
Mizuho acknowledges that Venture Global’s medium-term prospects are closely tied to international gas price differentials. However, they are not convinced that the recent update has caused lasting damage to the company’s earnings potential or its ability to meet strategic milestones. The firm highlighted several positive aspects of Venture Global’s recent performance, including excess production at its facilities, the progress of commissioning and volume guidance for fiscal year 2025, and the potential for brownfield and greenfield expansions.
In light of the recent gas price trends and updated operational expense assumptions, Mizuho has revised its estimates for Venture Global. Despite the lowered price target, the firm reaffirms its Outperform rating, suggesting confidence in the company’s capacity to navigate the current challenges and capitalize on its operational strengths.
In other recent news, Venture Global’s earnings and revenue results have sparked a series of analyst revisions. The company reported fourth-quarter 2024 earnings and 2025 guidance that fell short of market expectations. Analysts from Bernstein SocGen, Guggenheim, Goldman Sachs, and Scotiabank (TSX:BNS) have adjusted their price targets for Venture Global, citing lower-than-expected financial performance and guidance. Bernstein SocGen cut their target to $12, highlighting the company’s 2025 EBITDA projections that did not meet market expectations. Guggenheim and Goldman Sachs both reduced their targets to $20, maintaining a Buy rating but noting concerns over rising costs and commodity market challenges. Scotiabank revised their target to $15, expressing concern over the company’s first-quarter performance as a publicly traded entity and significantly lower EBITDA expectations for 2025. Despite these challenges, Venture Global’s Plaquemines project has shown positive progress, although concerns about capital cost inflation persist. The company’s management remains optimistic about future demand outpacing supply, a sentiment echoed by analysts who continue to see long-term value despite near-term setbacks.
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