GTLS - Chart Industries started at Neutral at JPM as beneficiary of global LNG buildout

2023-06-02 16:14:37 ET

Chart Industries ( NYSE: GTLS ) is assumed with a Neutral rating and a $138 price target at J.P. Morgan, citing its "above average balance sheet leverage, lack of cash return and slight downside risk" to 2023-24 EBITDA guidance; the stock closed Friday +8.7% .

JPM's Arun Jayaram said he expects Chart ( GTLS ) will be "a prime beneficiary of the buildout of global LNG capacity and rising hydrogen and carbon capture capex."

Chart's ( GTLS ) consolidated backlog at the end of March totaled a record $3.9B, and Jayaram thinks favorable backlog trends provide solid earnings visibility, as 60% of the company's standalone 2023 revenue guidance was in backlog, while about half of Howden's revenue mix was after-making, which typically is converted to revenue within 120 days.

Jayaram said a Neutral rating is justified, "as deleveraging the balance sheet in a macro setting with recessionary risks and nearly flawless execution on the Howden acquisition isn't a short putt."

More on Chart Industries:

• Financial and valuation comparison to sector peers
• Analysis: Chart Industries Is Dodging A Bullet
• Stock price return: Up 5.5% YTD, down 34% in the past 12 months

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