LNG - Cheniere Energy: Sales Up But Prices Down Leading To Hold
2024-03-23 21:11:31 ET
Summary
- Cheniere Energy's terminals have high efficiency and strong demand, leading to increased expectations for LNG sales in 2024.
- The Henry Hub price forecast was cut from $3.26/MMBTU to $2.65/MMBTU for 2024 and from $3.26/MMBTU to $2.94/MMBTU for 2025.
- We are lowering the forecast for TTF prices from $503/thousand cubic meters to ? $382/thousand cubic meters for 2024 and from $464/thousand cubic meters to $377/thousand cubic meters for 2025.
- We are lowering the target price for the shares from $198 to $192. The rating is HOLD.
Investment thesis
LNG sales totaled 12.5 mln tons in 4Q 2023 (we forecast 11.3 mln tons, meaning a difference of 10.6%). LNG selling prices across all segments averaged $384/t, down 6% from our forecast of $409/t.
In 2023, the volume of LNG sold exceeded production capacity by 6%, reflecting the high efficiency of Cheniere Energy's (LNG) terminals and strong demand for the company’s natgas. Given the observed seasonal increase in production efficiency, we have raised our expectations for the volume of LNG sales in 2024 to 47.6 mln tons (-0% y/y). We expect that Corpus Christi Stage III will start to operate in 1Q 2025, enabling the company to ramp up the capacity, with 100% utilization of the terminals, to 49.3 mln tons (+4% y/y)....
Cheniere Energy: Sales Up But Prices Down, Leading To Hold