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On Monday, Bernstein SocGen analysts adjusted their outlook on Venture Global (NYSE:VG), reducing the price target from $18.00 to $12.00 while maintaining a Market Perform rating on the stock. The revision follows Venture Global’s inaugural earnings report which included EBITDA projections for 2025 that did not meet market expectations. According to InvestingPro data, the company currently generates an EBITDA of $2.1 billion and carries a significant debt burden, with a debt-to-equity ratio of 10.3x. The company’s guidance, with a midpoint 20% below previous estimates, includes a $7-8 per million cubic feet (mcf) fee for commissioning cargoes.
Venture Global’s management noted that while individual trains at the Calcasieu Pass 1 (CP1) facility have at times produced volumes exceeding their nameplate capacity, the overall site has not achieved this level consistently. With a market capitalization of $22.3 billion and an Altman Z-Score of 0.74, InvestingPro analysis indicates the company’s financial health score is currently rated as WEAK. Bernstein SocGen analysts continue to forecast production levels that surpass the nameplate up to the guided peak capacity but have not factored in potential additional expansions.
The company also announced plans for an 18.6 million tonnes per annum (MTPA) phase 3 expansion project at Plaquemines, aiming for a final investment decision (FID) by mid-2027 and the commencement of liquefied natural gas (LNG) production by mid-2029. Venture Global indicated that future contracts might range from three to twenty years in duration.
In comparison to its industry peer Cheniere, Venture Global provided a more pronounced sensitivity in its 2025 EBITDA forecast, estimating an impact of $625-675 million for every $1/mcf variation in liquefaction fees. Bernstein SocGen has updated their financial model for Venture Global to incorporate the latest 2025-26 Title Transfer Facility (TTF) strip pricing, the company’s operational expenditure and shipping guidance, and marginally increased production volumes in line with Venture Global’s volume guidance.
Following the earnings report and the updated guidance, Venture Global’s stock price experienced a significant decline, closing 36% lower. The stock now trades at $9.34, near its 52-week low of $8.62, representing a 63% decline from its 52-week high of $25.50. For deeper insights into Venture Global’s valuation and financial metrics, investors can access comprehensive analysis through InvestingPro, which offers 17 additional ProTips and a detailed Pro Research Report covering key performance indicators and growth prospects.
In other recent news, Venture Global’s fourth-quarter 2024 earnings report revealed a significant revenue decline, with the company reporting $1.5 billion in revenue, a 737% decrease from the previous year. Despite this, net income surged to $871 million, showing improved profitability. Analysts from Guggenheim, Goldman Sachs, and Scotiabank (TSX:BNS) reacted to these results by adjusting their price targets for Venture Global. Guggenheim and Goldman Sachs both lowered their price targets to $20, maintaining a Buy rating, while Scotiabank reduced its target to $15 with a Sector Perform rating. The revisions were influenced by the company’s earnings miss and a weaker 2025 guidance, attributed to a challenging commodity market and rising costs.
Positive developments were noted, such as progress at the Plaquemines project and the CP2 project’s advancement toward its Final Investment Decision. However, these were overshadowed by concerns about capital cost inflation and the company’s ability to capitalize on global gas margins. Venture Global’s management remains optimistic, forecasting a consolidated adjusted EBITDA between $6.8 and $7.4 billion for 2025. The company plans to export between 140 to 148 cargos from its Capshoe Pass facility, with ongoing expansions expected to enhance production capacity. Despite the challenges, analysts like those from Guggenheim and Goldman Sachs acknowledge the long-term potential of Venture Global, maintaining a positive outlook for the company’s future growth.
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