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Investing.com -- Nextdecade Corp (NASDAQ:NEXT) stock surged 10.9% after TD Cowen analyst Jason Gabelman upgraded the company from Hold to Buy and raised his price target to $11.00 from $9.00.
The upgrade comes as Gabelman sees a clear path for NextDecade’s Rio Grande LNG project to sanction not only Train 4 but also Train 5. The analyst expects the company to provide additional financial transparency following Final Investment Decision (FID), which should increase investor confidence in the project.
According to TD Cowen, NextDecade only needs to secure an additional 1 million tonnes per annum (tpa) offtake agreement to fully commercialize Train 5. The firm anticipates FID for both Trains 4 and 5 to occur before the September 15 expiry of Engineering, Procurement, and Construction (EPC) price validity.
The analyst noted that despite concerns about potential LNG oversupply in the second half of this decade, new offtake contracts are being signed at a pace consistent with the past five years. Gabelman expects Rio Grande LNG to capture some of this activity to support growth.
TD Cowen also highlighted that NextDecade has already secured an EPC contract for Phase 2 (Trains 4 and 5), which minimizes additional upside risk from tariffs that could increase construction costs.
Following the FID, NextDecade is expected to provide details on increasing its ownership in Phase 2 from 40% to 60%, which could further boost investor interest in the stock.
With improved visibility on project sanctioning, strengthened contractual momentum, and a clear roadmap to expanding its Phase 2 ownership stake, NextDecade appears poised for renewed investor optimism. The stock’s 10.9% surge following the TD Cowen upgrade reflects growing market confidence in the company’s ability to execute on its Rio Grande LNG ambitions amid a supportive long-term demand outlook.