UBS maintains Cheniere Energy buy rating, $277 target

On Tuesday, UBS analysts maintained a Buy rating for Cheniere Energy (NYSE:LNG) with a steady price target of $277.00. Currently trading at $226.94 with a market capitalization of $50.5 billion, the company maintains a strong "Buy" consensus among analysts, with price targets ranging from $220 to $303. According to InvestingPro analysis, the stock appears overvalued at current levels. The affirmation comes as Cheniere Energy announced the completion of the commissioning phase and the substantial completion of Train 1, which is now set to contribute to the company’s financial results. This development is anticipated to provide an uplift to Cheniere’s 2025 guidance. The company has demonstrated strong financial performance, with an EBITDA of $7.3 billion and a healthy gross profit margin of 49% in the last twelve months.

Cheniere Energy reached a significant milestone in December 2024 when it began producing liquefied natural gas (LNG) from Train 1. The company successfully completed this project within budget and more than six months ahead of the promised completion date. The Corpus Christi liquefaction facility’s expansion, known as CCL Stage 3, includes seven midscale trains with a projected combined production capacity exceeding 10 million tons per annum (mtpa) of LNG. Upon the completion of CCL Stage 3, the total expected output capacity for the facility will surpass 25 mtpa of LNG.

During the fourth quarter earnings call, Cheniere revealed that all seven trains included in the CCL Stage 3 expansion are slated to reach substantial completion by the end of 2026. Analysts view the latest update on Train 1 as a positive development, enhancing the company’s guidance for 2025 and signaling potential growth.

Cheniere Energy is not only focused on the CCL Stage 3 expansion but is also pursuing additional growth through the development of Midscale Trains 8 and 9 and the Sabine Pass (SPL) Expansion. These initiatives position the company as a key player in meeting the rising global demand for new LNG supplies. With a five-year revenue CAGR of 11% and strong return on equity of 60%, the company shows promising growth potential. Discover more detailed insights and 6 additional ProTips about Cheniere Energy’s growth prospects with an InvestingPro subscription, including exclusive access to comprehensive Pro Research Reports covering 1,400+ top stocks.

In other recent news, Cheniere Energy has received significant attention following several developments. The company reported earnings that fell short of both Stifel’s and consensus estimates, largely due to lower-than-expected revenues from reduced volumes. Despite this, Stifel raised its price target for Cheniere Energy to $255, expressing confidence in the company’s growth prospects. Jefferies also maintained a Buy rating with a $303 price target, noting optimism about Cheniere Energy’s financial outlook and its ability to meet future guidance.

Cheniere’s expansion plans received a boost as US regulators approved the expansion of its Corpus Christi LNG plant, allowing for the construction of additional production facilities. Furthermore, Fitch Ratings upgraded Cheniere Energy’s long-term Issuer Default Rating to ’BBB’, highlighting the company’s strong operating profile and stable cash flows from long-term contracts. Mizuho (NYSE:MFG) Securities also raised its price target to $254, citing confidence in Cheniere Energy’s strategic permitting approach for future expansions.

These developments underscore Cheniere Energy’s ongoing efforts to enhance its production capacity and financial stability. The company is actively pursuing growth through strategic expansions at its Corpus Christi and Sabine Pass facilities. Analysts’ revised price targets and ratings reflect a positive outlook on Cheniere Energy’s ability to navigate the evolving energy landscape and capitalize on regulatory and market opportunities.

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