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On Friday, Stifel analysts adjusted their outlook on Golar LNG Ltd . (NASDAQ:GLNG) shares, lowering the price target from $55.00 to $50.00, while reaffirming a Buy rating on the stock. The company’s stock, currently trading at $40.49, has demonstrated strong momentum with a 76% return over the past year. According to InvestingPro analysis, GLNG shows promising growth potential, with analysts expecting both sales and net income growth this year. The adjustment follows Golar LNG’s announcement regarding the Final Investment Decision (FID) for the redeployment of the Hilli and a new contract for the first MK2 floating liquefied natural gas (FLNG (OL:FLNG)) unit, currently under construction in China.
Stifel’s analysts highlighted the significance of these developments for Golar LNG, noting that the MK2 project is expected to effectively double the company’s EBITDA backlog and mitigate capital expenditure risks. The terms of the contract, although slightly less favorable than initially indicated by Golar LNG, were anticipated by the analysts and are seen as a major catalyst for the stock. With current EBITDA at $138.64 million and a healthy gross profit margin of 48.56%, InvestingPro data reveals the company operates with a moderate debt level and maintains robust financial metrics.
Despite the lower price target, the analysts believe the finalized contract enhances the intrinsic value of Golar LNG shares, especially when compared to current market prices. The contract’s completion is viewed as a positive step towards solidifying Golar LNG’s financial future.
Moreover, Stifel’s analysts are optimistic about Golar LNG’s innovative approach, often referred to as a ’better mousetrap’, which they expect to yield a robust pipeline of similar opportunities in the future. This sentiment underscores the firm’s confidence in Golar LNG’s strategic positioning and potential for growth in the FLNG market. InvestingPro subscribers can access over 12 additional exclusive tips and a comprehensive analysis of GLNG’s financial health, which currently stands at "FAIR" with particularly strong price momentum scores.
In other recent news, Golar LNG Limited reported its fourth-quarter 2024 earnings with total operating revenues of $66 million, slightly missing the forecasted $67.42 million. Despite this, the company maintained a strong financial position with a total EBITDA of $59 million for the quarter and $241 million for the full year. Golar LNG declared a quarterly dividend of $0.25 per share, signaling confidence in its financial stability. Stifel analysts reaffirmed their Buy rating on Golar LNG, maintaining a price target of $55.00, highlighting the completion of a significant refinancing deal for the Gimi FLNG unit. This refinancing, involving a $1.2 billion arrangement with a Chinese leasing company, is expected to support Golar’s growth, particularly in funding the equity component for a second MK2 vessel. Additionally, Stifel analysts noted potential involvement in LNG projects in Argentina, which could generate substantial EBITDA for Golar LNG. The company’s specialized FLNG units are seen as critical to the success of these projects. Meanwhile, Stifel’s broader report on the LNG market highlighted the commencement of new projects and the impact of geopolitical tensions, indicating ongoing strategic reassessments by industry players.
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