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Investing.com -- UBS has initiated coverage on Gaztransport & Technigaz ( GTT ), setting a “buy” rating with a price target of €190, about 25% above the current share price.
Shares of the French company were up 2.5% at 05:25 ET (09:25 GMT).
The brokerage flags GTT’s strong market position in liquefied natural gas (LNG) containment systems, with more than 80% of revenues tied to LNG carriers.
UBS projects that GTT will be a key beneficiary of the expected 42% increase in global LNG volumes between 2024 and 2030, which could translate into a 60% rise in the company’s revenues over the same period.
The report points to a surge in final investment decisions (FIDs) on LNG projects as a major catalyst for GTT.
After a slowdown in 2024 and early 2025, UBS expects approvals to accelerate, with as much as 200 million tons per annum of new capacity likely to be sanctioned between 2025 and 2027.
This wave of projects is expected to boost orders for LNG carriers and, in turn, for GTT’s membrane technology.
UBS estimates 484 LNG carrier orders between 2025 and 2034, higher than the company’s guidance of more than 450. Ship retirements and longer shipping routes are seen as additional tailwinds.
The valuation is based on a multi-stage discounted cash flow model, using a weighted average cost of capital of 7.5% and a long-term terminal growth rate of 3% from 2040.
UBS expects earnings growth to remain ahead of consensus through 2030, projecting earnings per share to rise from €9.37 in 2024 to €14.60 in 2028.
The price target implies a 2026 price-to-earnings multiple of 16x and an EV/EBITDA multiple of 13x, broadly in line with historical averages. The stock also offers a projected dividend yield of 5%.
GTT’s growth, in short, is driven less by price fluctuations than the pace of LNG project approvals and carrier deliveries, which support the order book and long-term earnings prospects of the company.