CQP - Cheniere Energy Partners: No Material Upside Potential Despite Their Growing Distributions

• Whilst Cheniere Energy Partners kept their distribution growth alive throughout the turmoil of 2020, alas sadly there appears to be no material upside potential.
• When running a Monte Carlo simulation, if their quarterly distributions keep growing at $0.005 per unit, their intrinsic value appears to be 27% higher but there is one big caveat.
• This relates to their risk as defined by their Beta that is well beneath their similar peers, which in turn inflates the previous intrinsic value.
• When adjusting their Beta to equal that of their similar-sized peers, it produces an intrinsic value slightly below their current unit price and thus means that at best, their units are fully priced.
• My rating has still been upgraded to neutral from bearish because their unit price has dropped and broadly matches the estimated intrinsic value.

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