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After Cheniere Energy, Inc.’s (NYSEMKT:LNG) recent earnings announcement in September 2018, the consensus outlook from analysts appear bearish, as a -7.9% fall in profits is expected in the upcoming year relative to the past 5-year average growth rate of 22%. With trailing-twelve-month net income at current levels of -US$393.0m, the consensus growth rate suggests that earnings will decline to -US$361.9m by 2020. Below is a brief commentary around Cheniere Energy’s earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.
How will Cheniere Energy perform in the near future?
The 11 analysts covering LNG view its longer term outlook with a positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. I’ve plotted out each year’s earnings expectations and inserted a line of best fit to calculate an annual growth rate from the slope in order to understand the overall trajectory of LNG’s earnings growth over these next few years.
From the current net income level of -US$393.0m and the final forecast of -US$785.3m by 2022, the annual rate of growth for LNG’s earnings is 29%. This leads to an EPS of $4.37 in the final year of projections relative to the current EPS of $-1.69. With a current profit margin of -7.0%, this movement will result in a margin of -8.5% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For Cheniere Energy, I’ve put together three key factors you should further research:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is Cheniere Energy worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Cheniere Energy is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Cheniere Energy? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.