Improving export economics
Cheniere Energy (LNG), a leading liquified natural gas exporter, stock hit a new 52-week high of $70.21 after Morgan Stanley upgraded it from “equal-weight” to “overweight” on September 26. Morgan Stanley analyst Fotis Giannakoulis thinks that rising global demand for liquefied natural gas and lower natural gas prices due to structural oversupply could improve Cheniere Energy’s export economics. Morgan Stanley also raised Cheniere Energy’s target price from $63.0 to $80.0.
The above chart shows how analysts’ recommendations on Cheniere Energy stock changed in the last few months.
Wall Street analysts have given Cheniere Energy stock a median target price of $75.54, which implies an estimated upside of 10% for the next 12 months. The stock closed at $68.93 on September 26.
Among the 14 analysts tracking Cheniere Energy, nine recommend the stock as a “strong buy,” while four recommend it as a “buy.” One analyst recommends the stock as a “hold.” None of the analysts have a “sell” recommendation on Cheniere Energy.
Morgan Stanley also raised Cheniere Energy Partners’ (CQP), Cheniere Energy’s subsidiary, target price from $35.0 to $39.0 on September 26.
Despite the US-China trade war intensifying, Cheniere Energy doesn’t expect to see an economic impact. The company has long-term contracts and expects the demand from China to rise. Morgan Stanley expects that the trade war scenario might deter new entrants, which would benefit established players like Cheniere Energy. Cheniere Energy gained momentum after China imposed 10% tariffs on liquefied natural gas—lower than earlier expectations of 25%.