Floating LNG Projects Will Unlock Global Energy Opportunities

Key Takeaways

• Long-term LNG contracts, proprietary technology, and operational excellence position the company for strong, stable growth as global demand shifts toward cleaner energy.
  
• Focus on asset-light infrastructure, upside exposure to commodity prices, and robust financial management enhances flexibility, profitability, and resilience against market volatility.
  
• Growing renewable adoption and political risks threaten Golar's revenue stability, while concentrated FLNG exposure and high capital needs heighten operational, financial, and contract vulnerability.

Catalysts

Designs, converts, owns, and operates marine infrastructure for the liquefaction of natural gas.

• Secured 20-year charters for both the Hilli (re-deploying to Argentina) and the yet-to-be-completed Mark II FLNG provide over $13 billion in highly visible, contracted EBITDA backlog, underpinned by surging LNG demand from emerging markets for energy security and power generation-boosting long-term revenue and earnings predictability.
  
• Golar's unique floating LNG technology and proven operational performance (100% uptime on Hilli, rapid commercialization of Gimi with BP in West Africa) distinctly position the company to benefit from accelerated global energy transition away from coal and oil towards lower-carbon, flexible LNG-supporting higher capacity utilization and margin expansion.
  
• Significant built-in commodity upside exposure through contracts (25% profit share above $8/MMBtu LNG price, and additional 10% equity in Southern Energy JV) enables Golar to capture increasing LNG price volatility and structural market tightness, providing considerable incremental EBITDA potential and expanding net income during market upswings.
  
• Completion of the asset monetization program (full exit from shipping) and continued focus on capital-light, high-return infrastructure improves return on capital and free cash flow, while a solid balance sheet and access to long-term, optimized debt (including pending refinancing and new bond capacity) support self-funded growth and lower financial risk.
  
• A rapidly expanding pipeline of future FLNG project opportunities-driven by acute LNG supply-demand imbalance and global diversification needs-combined with limited available FLNG yard slots and Golar's modular, flexible solutions, set the company up for scalable contract wins, translating into sustained long-term top-line and bottom-line growth.

Golar LNG Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Golar LNG's revenue will grow by 20.9% annually over the next 3 years.
• Analysts assume that profit margins will increase from 1.5% today to 33.5% in 3 years time.
• Analysts expect earnings to reach $152.8 million (and earnings per share of $1.23) by about August 2028, up from $3.8 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $294 million in earnings, and the most bearish expecting $-54.2 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 41.8x on those 2028 earnings, down from 1102.5x today. This future PE is greater than the current PE for the US Oil and Gas industry at 13.0x.
• Analysts expect the number of shares outstanding to grow by 0.66% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.9%, as per the Simply Wall St company report.

Golar LNG Future Earnings Per Share Growth

Risks

• Intensified global decarbonization and net-zero agendas could structurally erode long-term LNG demand, as countries and investors increasingly prioritize renewables and disincentivize new fossil fuel infrastructure, risking both future contract opportunities and the value of Golar's 20
• to 30-year assets-potentially suppressing revenue and cash flow generation past the next decade.
  
• Golar's concentrated exposure in FLNG, with only three units (two operational, one under conversion) and reliance on a handful of long-dated contracts, raises operational and counterparty risk; any technical, regulatory, or payment disruptions (especially in Argentina or West Africa) could lead to significant EBITDA and earnings volatility.
  
• Long-term debt and ongoing heavy capital expenditure for converting/constructing additional FLNG units could materially increase net debt to EBITDA towards 2.8x–5x; if expected cash flows from new or existing charters are delayed or contract terms worsen, this leverage may pressure net income, limit capital returns, or force shareholder dilution.
  
• While Argentina offers substantial contract backlog and commodity upside, the business environment-despite legal, currency, and regulatory protections-still exposes Golar to heightened sovereign, political, regulatory, and FX risks; unexpected changes or enforcement challenges could endanger the sizable revenue, margins, and return of capital tied to the country.
  
• Rapid advancement of battery storage and declining renewable costs could reduce the transitional role of LNG faster than forecast, potentially resulting in global overcapacity and downward pressure on FLNG charter rates-directly threatening Golar's pricing power, fleet utilization, revenue growth, and long-run net margin stability.

Valuation

• The analysts have a consensus price target of $49.3 for Golar LNG based on their expectations of its future earnings growth, profit margins and other risk factors.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $456.3 million, earnings will come to $152.8 million, and it would be trading on a PE ratio of 41.8x, assuming you use a discount rate of 6.9%.
• Given the current share price of $40.19, the analyst price target of $49.3 is 18.5% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.