Spiro M. Dounis, an analyst from Citi, has initiated a new Hold rating on Venture Global, Inc. Class A (VG).
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Spiro M. Dounis has given his Hold rating due to a combination of factors, primarily focusing on the potential and risks associated with Venture Global, Inc.’s position in the LNG market. The company has an ambitious growth plan, aiming to increase its capacity significantly, which could be sustained through internal funding. However, the open contract position that allows for rapid cash flow recycling also introduces the risk of earnings volatility, especially with an anticipated global LNG oversupply starting in 2027.
While the company’s innovative approach to project funding and execution could lead to enhanced returns, the reliance on bringing major projects online poses challenges. Approximately 40% of the company’s valuation is contingent upon successfully executing these projects in a potentially tepid market. This dual-edged strategy, with both high potential rewards and significant risks, underpins the Hold rating, suggesting investors remain cautious while acknowledging the company’s growth potential.
In another report released on February 4, Bernstein also initiated coverage with a Hold rating on the stock with a $20.00 price target.