Cheniere: LNG Negativity Is Not Supported By Fundamentals (Rating Upgrade)
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Zoltan Ban8.4K FollowersFollow5ShareSavePlay(11min)CommentsSummaryCheniere Energy is rated a buy following a 23% pullback from all-time highs, driven by weak European and Asian natural gas prices.LNG's Q3 results showed 28% revenue growth and 33% net income growth, with a solid 21% income-to-revenue ratio.US LNG exports are poised to surpass Norway as Europe's top gas supplier, enhancing LNG's future pricing power. lyash01/iStock via Getty Images Investment thesis Cheniere Energy (LNG) shares are down over 9% this year, and about 23% below their all-time highs. The pullback in its share price is mostly due to weaker natural gas spot prices in places like Europe & Japan, evenThis article was written byZoltan Ban8.4K FollowersFollowMy name is Zoltan Ban, I have a BA in economics. I am a personal investor with two decades of active trading experience.Analyst’s Disclosure:I/we have a beneficial long position in the shares of LNG, EQNR either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Quick InsightsWhat justifies the buy rating on LNG after recent share price declines?The 23% drop is seen as disconnected from fundamentals, with US LNG gaining market share in Europe and Cheniere delivering strong financial growth.How does LNG's revenue and profit growth compare to volume growth?Revenue rose 28% and net income 33% year-over-year, while LNG volume grew just 1.5%, indicating price-driven gains rather than volume expansion.What are the implications of LNG's shift from Europe to Asia?Although LNG is selling more into Asia, spot prices there remain tightly correlated with Europe, so the shift offers limited short-term financial relief.Recommended For You