UPDATE: Deutsche Bank on Cheniere Energy Following News of Contract with Pertamina
In a report published Friday, Deutsche Bank analyst Curt Launer reiterated a Buy rating on Cheniere Energy (NYSE: LNG), and raised the price target from $47.00 to $52.00.
In the report, Deutsche Bank noted, “Cheniere (LNG) announced that it had achieved a liquefaction contract with Pertamina for sales of liquefied natural gas to Indonesia that will be sourced from the proposed Corpus Christi liquefaction facility at LNG. This facility is expected to be approved by the US DOE in the first half of 2014 and to be under construction shortly after that. The contract represents about 18% of the volume from the first liquefaction train (out of a total of three) that is expected to be built at Corpus Christi. From the perspective of identifying Pertamina as a new long term customer for Cheniere, we note that it has the option of converting the Corpus Christi contract to a commitment at the Sabine Pass (SPL) Train #6 if that facility is built first. Including the new contract in our SoTP model for Cheniere increases our target price from $47 per share to $52 per share as shown in the table on page 2. Effectively, we are significantly increasing the valuation of the Corpus Christi facility by using a lower cost of equity to reflect the increased visibility of it being contracted and constructed. We rate LNG Buy with a TP of $52.”
Cheniere Energy closed on Thursday at $44.31.
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