Market Overview

Improving LNG Export Economics Fetch Cheniere Energy An Upgrade From Morgan Stanley

Improving LNG Export Economics Fetch Cheniere Energy An Upgrade From Morgan Stanley

With oil prices approaching multiyear highs, one Morgan Stanley analyst upgraded Cheniere Energy, Inc. (NYSE: LNG) Wednesday. 

The Analyst

Analyst Fotis Giannakoulis upgraded Cheniere Energy from Equal-weight to Overweight and upped the price target from $63 to $80.

The Thesis

Cheniere is poised to take advantage of its leading position and continue growing in small increments, taking advantage of rising global LNG demand and structural natural gas oversupply leading to lower feed gas prices, both of which suggest improving LNG export economics, Giannakoulis said in the upgrade note. (See his track record here.)

Morgan Stanley lowered its long-term Henry Hub natural gas price forecast to $2.50 per MMBtu.

The analyst said he expects the company to benefit from a lack of liquefaction capacity growth after 2020-21.

These factors together will result in margin expansion and capacity growth, Giannakoulis said. Cheniere will continue to add capacity, taking advantage of its solid operational platform as well as its ability to grow in small increments, he said. 

The trade standoff between the U.S. and China is likely to benefit established producers like Cheniere by creating barriers to entry for competition, the analyst said. 

Cheniere is in a position to guarantee the delivery of the contracted volume to its customers as opposed to competing greenfield producers that are seeking to reach final investment decisions on their projects, Giannakoulis said. This means Cheniere is more likely to sign new offtake agreements, he said.

The Price Action

Cheniere Energy shares have gained 27 percent year-to-date.

Related Links:

BMO Downgrades Antero Resources Following LNG Price Rally

The Week Ahead: Nike Earnings, FDA Debates E-Cig Industry, SurveyMonkey IPOs

Latest Ratings for LNG

Sep 2019ReinstatesEqual-Weight
Jul 2019Initiates Coverage OnNeutral
Mar 2019ReiteratesBuyBuy

View More Analyst Ratings for LNG
View the Latest Analyst Ratings

Posted-In: Fotis Giannakoulis Morgan StanleyAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (LNG)

View Comments and Join the Discussion!

Latest Ratings

ELMDDougherty & Co.Initiates Coverage On12.0
MRNSCantor FitzgeraldAssumes7.0
MNRLCapital One FinancialInitiates Coverage On23.0
SONVertical GroupUpgrades
UNPMorgan StanleyMaintains136.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Top 12 Cannabis Stocks By Market Cap One-Year Stock Price Performance

10 Biggest Price Target Changes For Wednesday