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Where Cheniere Energy Stock Could Go from Here


Jul. 2 2019, Published 9:54 a.m. ET

Cheniere Energy stock is overbought

With favorable developments on the trade war front, Cheniere Energy (LNG) stock hit a ten-month high on July 1. The recent surge has pushed the LNG (liquefied natural gas) stock into the overbought zone with a relative strength index of 73. It’s currently trading at $70.1, almost 6% and 9% above its 50-day and 200-day simple moving averages, respectively.

The stock’s large premium to both these support levels suggests strength. Its 50-day moving average level of close to $66.0 could act as a support for it in the short term.

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LNG stock saw a surge in volume as well. On July 1, almost 4 million shares exchanged hands compared to its average daily volume of 1.8 million. So far this year, Cheniere Energy stock is up ~18%, while its MLP subsidiary, Cheniere Energy Partners (CQP), is up more than 20%. The Alerian MLP ETF (AMLP) has soared ~12% so far in 2019. CQP makes up ~1.8% of AMLP.

Target price and analysts’ views

Based on analysts’ consensus estimates, Cheniere Energy stock has a mean target price of $81.2 compared to its current market price of $70.1. This difference indicates a potential upside of almost 16% over the next 12 months.

Analysts remain positive about Cheniere Energy stock. Among the 19 analysts currently tracking LNG, eight have given it “strong buy” recommendations, while ten have given it “buys.” One analyst has given it a “sell” recommendation. LNG hasn’t received any “sell” recommendations in over a year. From a valuation standpoint, Cheniere Energy stock is trading at an enterprise value-to-EBITDA multiple of 13x, lower than its historical average.

Cheniere Energy Partners has a mean price target of $41.7, implying an estimated downside of 2.6% for the next year. It’s currently trading at $41.7. Among the 18 analysts covering CQP, 11 have given it “holds,” four have given it “strong buys,” and three have given it “sells.”

Cheniere Energy Partners offers an attractive distribution yield. Read more in Comparing Cheniere Energy Partners’ Yield with Its Peers’.


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