Goldman Sachs Starts On Golar Bearish, Says Growth Story Already Priced In

There is downside to Golar LNG Limited’s GLNG stock as the growth story is already priced in and LNG supply growth is expected to slow in the near term, according to Goldman Sachs.

The Analyst

Goldman Sachs’ Sahar Islam initiated coverage of Golar LNG with a Sell rating and a price target of $12.

The Thesis

LNG supply additions are expected to have peaked in 2018-19 and could decelerate through 2020-24, Islam said in the initiation note.

He added that shipping rates had risen in the recent past, with new LNG supply entering the market, but this positive trend is likely to slow from 2020.

The company’s LNG shipping division, which is estimated to account for more than half the group revenue and around 30% of earnings, is the most volatile part of the business, Islam mentioned.

“Given the volatility in shipping rates and still healthy supply levels, we expect charter rates to decline from here,” the analyst wrote.

Through its various holdings, Golar LNG has exposure to some longer-term contracts. Islam added, however, that their value is already priced in.

Price Action

Shares of Golar LNG were up 2.60% to $13.65 at the time of publishing on Wednesday.

Posted In: Goldman SachsSahar IslamAnalyst ColorPrice TargetCommoditiesInitiationMarketsAnalyst Ratings

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.