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On Thursday, BTIG analyst Gregory Lewis (JO:LEWJ) adjusted the price target for New Fortress Energy (NASDAQ:NFE) shares, decreasing it to $8.00 from the previous $15.00, while retaining a Buy rating on the stock. Currently trading at $6.78 with a market capitalization of $1.86 billion, the company’s first-quarter earnings report for 2025 revealed an EBITDA of approximately $82 million, significantly missing the consensus estimate by about 66%. The shortfall was attributed to lower-than-expected volumes at the company’s key terminals in Puerto Rico and Brazil. According to InvestingPro, the company faces significant operational challenges with several key metrics requiring attention.
New Fortress Energy’s shares experienced a substantial drop of around 30% in aftermarket trading on the day of the earnings announcement, contributing to a steep 55% decline year-to-date. The company carries a substantial total debt of $9.5 billion, and InvestingPro analysis highlights this as a significant concern. Despite the earnings miss, BTIG’s analysis indicates that the company is shifting its strategic focus towards refinancing its debt. Management has noted the potential for securing asset-level debt as part of their strategy to manage their 2026 notes, which are currently yielding around 25%.
The company’s recent divestiture of its Jamaica operations has allowed it to concentrate on addressing its financial obligations, which is crucial given its high debt-to-equity ratio of 5.06 and tight current ratio of 0.94. Creditors have provided some relief by waiving the requirement that approximately 75% of asset sale proceeds be used to pay down super senior debt. This waiver enables New Fortress Energy to allocate the remaining proceeds, estimated at around $390 million, towards reducing its revolver debt, which has approximately $900 million drawn, and to begin addressing its 2026 notes, which have about $500 million outstanding.
BTIG’s outlook for New Fortress Energy suggests that the company is expected to pursue refinancing options in the near term. This move is anticipated as the firm prepares for an increase in EBITDA from its Brazil operations later in the year, which could improve its financial standing and liquidity. InvestingPro’s Fair Value analysis suggests the stock is slightly undervalued at current levels, with additional insights available in the comprehensive Pro Research Report, which covers over 1,400 US stocks.
In other recent news, New Fortress Energy reported disappointing first-quarter 2025 results, with earnings per share (EPS) at -$0.73, significantly missing the forecast of -$0.16. Despite this, the company exceeded revenue expectations, reporting $690.3 million against an anticipated $507.53 million. The company also improved its liquidity position with $1.055 billion from the sale of its Jamaica assets. However, delays in Brazil power projects could impact future earnings. Analysts from firms like BTIG and Deutsche Bank (ETR:DBKGn) raised questions about the company’s liquidity and debt refinancing plans during the earnings call. The company is focused on refinancing corporate debt and simplifying its balance sheet over the next 12 months. New Fortress Energy is also optimistic about its future EBITDA and gains, projecting estimates between $1.25 billion and $1.5 billion for 2025. The company’s strategic focus is on asset-level financing and debt reduction following the Jamaica asset sale.
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