Update shared on 31 Oct 2025
Fair value Decreased 22%Analysts have lowered their price target for New Fortress Energy from $4.30 to $3.38, citing softer profit margin expectations and a series of recent downgrades from industry research firms.
Analyst Commentary
Bullish Takeaways
- Bullish analysts are encouraged by the company's long-term growth prospects in the liquefied natural gas sector. Improved operational execution could support a stronger recovery.
- Recent capital allocation strategies may provide the foundation for greater efficiency and higher returns as market conditions stabilize.
- Some view the recent reset in share price targets as an opportunity for upside, especially if profit margins can rebound above current lowered expectations.
Bearish Takeaways
- Bearish analysts highlight the recent downgrades and sharp reductions in price targets as evidence of market skepticism regarding New Fortress Energy's short-term execution and earnings quality.
- Sustained profitability concerns persist, with softening profit margins weighing on forecasts and investor sentiment alike.
- The risk of further downward earnings revisions is seen as elevated, particularly given the company's exposure to commodity price fluctuations and execution risk on new projects.
- Current valuation multiples remain under pressure as analyst consensus anticipates weaker performance compared to prior periods.
What's in the News
- New Fortress Energy finalized a $4 billion, seven-year agreement to supply liquefied natural gas to Puerto Rico after several months of negotiations. The news led to a nearly 40% surge in New Fortress shares (Bloomberg).
- The company announced it achieved first fire at the 624 MW CELBA 2 Power Plant in northern Brazil, initiating the commissioning process. Commercial operations are expected later this year.
- New Fortress reached an agreement on contract terms with the Puerto Rico Public-Private Partnerships Authority for long-term LNG supply. The agreement is pending final approval by the oversight board.
- Amid recent operational developments, the company has received notice from Nasdaq of non-compliance due to delayed 10-Q filing. It has time to regain compliance before facing potential delisting.
- New Fortress Energy is contemplating bankruptcy after disappointing Q2 results and a warning of imminent debt covenant violations. The company has launched a review of strategic alternatives.
Valuation Changes
- Consensus Analyst Price Target has decreased from $4.30 to $3.38, reflecting a notable reduction in expectations.
- Discount Rate has changed minimally, moving from 6.78% to 6.78%.
- Revenue Growth projections are virtually unchanged, remaining at approximately 22.10%.
- Net Profit Margin has dropped from 15.11% to 14.91%.
- Future P/E ratio has fallen from 3.30x to 2.63x. This indicates a lower valuation for expected earnings.
Disclaimer
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