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Cheniere Energy (LNG)
NYSE:LNG
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Cheniere Energy
(NYSE:LNG)
75Outperform
Positive Factors
Financial Performance
LNG's 13% pullback is seen as a buying opportunity given its limited exposure to spot commodity prices and ability to buy back shares.
Growth Strategy
Aggressive permitting strategy will optimize flexibility on growth, allowing Cheniere to pursue more targeted expansions and maximize project accretion.
Production Outlook
LNG has a highly visible path to increased production, reaching ~80mtpa by the future fiscal year.
Negative Factors
Earnings Performance
LNG has been a significant underperformer compared to gas-levered Midstream 'C-corps' due to lack of exposure to domestic data center demand and absence of earnings catalysts for FY24.
Market Pressure
The introduction of tariffs from the US and potential retaliatory tariffs has weighed on energy equities.
Cheniere Energy (LNG) vs. S&P 500 (SPY)
Market Cap
$49.09B
Dividend Yield0.85%
Average Volume (3M)2.35M
Price to Earnings (P/E)15.5
Beta (1Y)0.70
Revenue Growth-22.22%
EPS Growth-64.97%
CountryUS
Employees1,714
SectorEnergy
Sector Strength44
IndustryOil & Gas Midstream
Share Statistics
EPS (TTM)14.25
Shares Outstanding222,814,440
10 Day Avg. Volume3,174,549
30 Day Avg. Volume2,350,812
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.23
Price to Cash Flow (P/CF)7.70
P/FCF Ratio7.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$259.54Price Target Upside17.81% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
Cheniere Energy Business Overview & Revenue Model
Company DescriptionCheniere Energy, Inc., an energy infrastructure company, primarily engages in the liquefied natural gas (LNG) related businesses in the United States. It owns and operates the Sabine Pass LNG terminal in Cameron Parish, Louisiana; and the Corpus Christi LNG terminal near Corpus Christi, Texas. The company also owns Creole Trail pipeline, a 94-mile natural gas supply pipeline that interconnects the Sabine Pass LNG Terminal with several interstate and intrastate pipelines; and operates Corpus Christi pipeline, a 21.5-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal with various interstate and intrastate natural gas pipelines. It is also involved in the LNG and natural gas marketing business. The company was incorporated in 1983 and is headquartered in Houston, Texas.
How the Company Makes MoneyCheniere Energy generates revenue primarily through the production and sale of liquefied natural gas. The company's revenue model is centered around long-term contracts with customers worldwide, which include utility companies and energy traders. These contracts typically have take-or-pay clauses, ensuring a steady revenue stream regardless of fluctuations in demand. Additionally, Cheniere earns money through spot market sales and short-term contracts, which allow it to capitalize on favorable market conditions. The company's strategic location of its terminals enables it to efficiently access both Atlantic and Pacific markets, enhancing its competitive position. Key partnerships and agreements with major energy companies further bolster Cheniere's earnings by facilitating access to global markets and ensuring a reliable supply of natural gas for liquefaction.
Cheniere Energy Financial Statement Overview
Summary
Cheniere Energy exhibits strong financial performance with improving profitability, as seen in its income statement and cash flow metrics. The company has managed to enhance its cash flow stability despite historical balance sheet challenges. Continued focus on debt management and revenue growth is essential.Income Statement
Cheniere Energy has demonstrated strong profitability with a significant improvement in net profit margin from past losses to substantial profits. The gross profit margin in the recent year is robust due to strategic cost management. However, the revenue growth rate has seen some decline, indicating potential market challenges or saturation in some segments.80
Positive
Balance Sheet
The company's debt-to-equity ratio has improved as equity becomes positive, though it remains leveraged. The return on equity has shown improvement as the company turned profitable, but historical equity deficits highlight past financial instability. The equity ratio improvement suggests better financial health, though vigilance is needed to manage liabilities.70
Positive
Cash Flow
Cheniere Energy has a strong cash flow position with consistent free cash flow generation and a solid operating cash flow to net income ratio, indicating efficient cash management. The company has shown good control over capital expenditures, enhancing its cash flow stability.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 15.70B | 20.39B | 33.43B | 15.86B | 9.36B | Gross Profit |
| 6.61B | 16.01B | 5.00B | -364.00M | 2.94B | EBIT |
| 6.13B | 15.49B | 4.56B | -701.00M | 2.63B | EBITDA |
| 7.53B | 16.91B | 5.62B | 171.00M | 3.57B | Net Income Common Stockholders |
| 3.25B | 9.88B | 1.43B | -2.34B | -85.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.19B | 4.07B | 1.35B | 1.40B | 1.63B | Total Assets |
| 43.86B | 43.08B | 41.27B | 39.26B | 35.70B | Total Debt |
| 3.03B | 26.79B | 27.95B | 31.95B | 31.66B | Net Debt |
| -157.00M | 22.72B | 26.60B | 30.55B | 30.03B | Total Liabilities |
| 33.80B | 34.06B | 41.44B | 39.29B | 33.48B | Stockholders Equity |
| 5.70B | 5.06B | -2.97B | -2.57B | -191.00M |
| Cash Flow | Free Cash Flow | |||
| 5.39B | 6.30B | 8.69B | 1.50B | -574.00M | Operating Cash Flow |
| 5.39B | 8.42B | 10.52B | 2.47B | 1.26B | Investing Cash Flow |
| -2.28B | -2.20B | -1.84B | -912.00M | -1.95B | Financing Cash Flow |
| -4.45B | -4.18B | -8.01B | -1.82B | -235.00M |
Cheniere Energy Technical Analysis
Positive
220.31
Price Trends
220.49
Negative
221.23
Negative
201.73
Positive
Market Momentum
-2.42
Positive
50.32
Neutral
60.30
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LNG, the sentiment is Positive. The current price of 220.31 is below the 20-day moving average (MA) of 222.73, below the 50-day MA of 220.49, and above the 200-day MA of 201.73, indicating a neutral trend. The MACD of -2.42 indicates Positive momentum. The RSI at 50.32 is Neutral, neither overbought nor oversold. The STOCH value of 60.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LNG.
Cheniere Energy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $56.03B | 12.72 | 13.40% | 7.87% | 5.20% | 18.35% | |
77 Outperform | $64.17B | 11.12 | 20.78% | 7.09% | 12.71% | 6.74% | |
75 Outperform | $49.09B | 15.52 | 60.45% | 0.85% | -22.22% | -64.97% | |
71 Outperform | $58.82B | 22.62 | 8.54% | 4.34% | -0.55% | 10.02% | |
71 Outperform | $68.83B | 31.04 | 17.92% | 3.41% | 8.06% | -30.11% | |
68 Neutral | $28.14B | 13.59 | 117.38% | 5.59% | -9.93% | -50.50% | |
57 Neutral | $7.57B | 4.34 | -4.83% | 6.50% | -0.19% | -64.60% |
* Energy Sector Average
Performance Comparison
LNG
Cheniere Energy
220.31
67.41
44.09%
CQP
Cheniere Energy Partners
58.13
14.76
34.03%
ET
Energy Transfer
16.33
2.19
15.49%
EPD
Enterprise Products Partners
29.63
3.04
11.43%
KMI
Kinder Morgan
26.47
9.39
54.98%
WMB
Williams Co
56.39
20.02
55.05%
Cheniere Energy Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: 0.69% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
The earnings call was largely positive, with strong financial performance, record production, and successful safety metrics highlighted. The company is progressing well on its projects and has a favorable outlook for 2025. However, geopolitical tensions and market volatility present ongoing challenges.Highlights
Strong Financial Performance
Cheniere generated consolidated adjusted EBITDA of approximately $1.6 billion in Q4 and $6.155 billion for the full year 2024. Distributable cash flow was approximately $1.1 billion in Q4 and $3.73 billion for the full year.
Record LNG Production
Produced a record amount of LNG in 2024, approximately 45 million tons, which is over 10% of the global LNG supply.
Successful Safety Performance
Achieved a top quintile safety performance with SPL achieving 11 million labor hours and Corpus Christi 7 million labor hours without a single lost time incident.
Progress on Corpus Christi Stage Three
Bechtel continues to execute construction ahead of schedule; total completion stood at 77.2% with the first LNG production achieved in December.
Positive Guidance for 2025
Introduced 2025 financial guidance of $6.5 billion to $7 billion in consolidated adjusted EBITDA and $4.1 billion to $4.6 billion in distributable cash flow.
Shareholder Returns and Debt Reduction
Repurchased almost 14 million shares for approximately $2.25 billion, increased dividend by 15%, and paid down $800 million of long-term debt.
Favorable LNG Market Conditions
Continued strong demand for LNG, particularly in Asia, with expectations of increased supply needs in the coming years.
Lowlights
Uncertain Geopolitical Environment
Ongoing geopolitical tensions, particularly the Russia-Ukraine conflict, continue to impact global energy markets.
Potential Supply Chain Challenges
Depleting gas resources in legacy supply areas like Egypt, Algeria, and Australia could impact supply stability.
Market Volatility
Moderation of international gas prices affected financial results, with a higher proportion of LNG being sold under long-term contracts.
Company Guidance
During the Cheniere Energy Fourth Quarter and Full Year 2024 Earnings Call, the company provided financial guidance for 2025, projecting consolidated adjusted EBITDA between $6.5 billion and $7 billion, with distributable cash flow anticipated to range from $4.1 billion to $4.6 billion. The guidance also includes distributions at Cheniere Energy Partners LP (CQP) of $3.25 to $3.35 per unit. In 2024, Cheniere achieved a consolidated adjusted EBITDA of approximately $6.155 billion and distributable cash flow of about $3.73 billion. The company produced a record 45 million tons of LNG, representing over 10% of the global supply, and completed significant projects, such as the Corpus Christi stage three, which is on track to commence operations. Additionally, Cheniere plans to continue its capital allocation strategy, having already repurchased 13.8 million shares and increased its dividend by 15% to $2 per share annually. For 2025, Cheniere aims to achieve production of 47 to 48 million tons of LNG, driven by the operational commencement of Corpus Christi stage three trains.Cheniere Energy Corporate Events
Executive/Board Changes
Cheniere Energy Appoints Matthew Runkle to Board
Neutral
Apr 2, 2025
On April 1, 2025, Matthew Runkle was appointed to the Board of Directors of Cheniere Energy, Inc., following a right granted to CQP Holdco LP in an agreement from 2012. Concurrently, Scott Peak resigned from the Board. This change in the board composition could influence the company’s strategic direction and stakeholder interests.
Dividends
Cheniere Energy Declares Quarterly Cash Dividend
Positive
Jan 28, 2025
On January 28, 2025, Cheniere Energy, Inc. declared a quarterly cash dividend of $0.500 per share, payable on February 21, 2025, to shareholders of record as of February 7, 2025. This announcement reflects Cheniere’s ongoing commitment to returning value to its shareholders and underscores the company’s strong financial position within the LNG industry.
Executive/Board Changes
Cheniere Energy Expands Board with New Appointment
Positive
Jan 21, 2025
On January 21, 2025, Cheniere Energy’s Board of Directors expanded to ten members, appointing W. Benjamin Moreland as a new independent director, who will also serve on the Audit and Compensation Committees. Mr. Moreland’s extensive experience in leadership roles across various industries is expected to enhance board perspectives and guide the company into the future, benefiting stakeholders.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.