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Cheniere Energy Stock Up on Raised EBITDA & DCF Forecast

Zacks Equity Research
Antero Midstream Corp. (AM) sets a new record of 18th straight quarterly dividend or distribution hike.

Bringing in pleasant news for investors, Cheniere Energy LNG recently lifted run-rate production and cash flow outlook, as well as authorized a share buyback program. Shares of the company moved up 2.47% to close the session at $64.74 on Jun 3, 2019.

It also made a final investment decision with respect to Train 6 of the Sabina Pass Liquefaction (SPL) project. Construction of the Train 6 will be handed over to contractor Bechtel Oil, Gas and Chemicals, Inc. Notably, SPL Train 5, whose construction was completed a few months back, is set for first commercial delivery in August 2019, under contracts with TOTAL S.A. TOT and Centrica plc.  

The largest U.S. liquefied natural gas exporter increased its annual run-rate output guidance to 4.7-5 million tons per annum from 4.5-4.9 million tons on the back of production and maintenance optimization, along with debottlenecking at the SPL project. Taking into account the impact of SPL Train 6 and increased run-rate production guidance, the company has lifted its EBITDA and distributable cash flow guidance for 2019. It now expects adjusted EBITDA and DCF in the band of $5.2-$5.6 billion and $8.40-$9.60 per share, respectively.

Boosting investors’ confidence, Cheniere Energy authorized a stock buyback program of $1 billion over the next three years. Given first-mover advantage in the LNG export market, the firm is primed for significant revenue and earnings growth.Importantly, the Zacks Rank #3 (Hold) company currently exports to around 30 countries worldwide, as the firm aims at turning the natural gas glut in the United States into export revolution. Cheniere Energy looks well positioned to maintain revenue growth trajectory over the coming years, backed by solid operations and long-term contracts. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In a separate release, Cheniere Energy announced that it has signed a deal with Apache Corporation APA, wherein the latter will sell 140,000 million British thermal units of natural gas to Corpus Christi Stage 3 over 15 years. Notably, the Corpus Christi project is the third export facility in the United States that produces LNG, after Cheniere’s Sabina Pass and Dominion Energy, Inc.’s D Cove Point terminal.

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