Global LNG Capacity Expansion Will Drive Powerful Long Term Demand Tailwinds

Catalysts

About Venture Global

Venture Global develops, builds and operates large scale LNG export facilities that deliver low cost liquefied natural gas to global customers.

What are the underlying business or industry changes driving this perspective?

• Rapid scaling of LNG production capacity toward more than 100 MTPA through CP2, Plaquemines and future brownfield expansions positions Venture Global to capture outsized share of structurally rising global LNG demand. This supports strong long term revenue growth and higher consolidated EBITDA.
• Proven ability to deliver mega projects on compressed timelines, exemplified by Plaquemines accounting for over 80 percent of global LNG capacity additions in 2025, accelerates cash generation during construction and commissioning. This enhances returns on equity and boosts near to mid term earnings power.
• Industry leading low cost position driven by modular mid scale technology, construction optimization and extensive operational data analytics enables Venture Global to consistently offer attractive long term pricing while preserving premium margins. This supports resilient net margins across commodity cycles.
• Growing portfolio of 20 year SPAs with European and global utilities, combined with large volumes of uncontracted “excess” output for medium and short term sales, creates a blended revenue mix with high visibility base cash flows and meaningful upside to liquefaction fees. This underpins consolidated adjusted EBITDA growth.
• Global shift toward affordable gas fired power to replace coal and meet surging electricity needs from industrialization and data center growth supports sustained LNG import demand in Europe and emerging markets. This extends Venture Global’s runway for volume expansion and drives durable top line and cash flow growth.

Assumptions

This narrative explores a more optimistic perspective on Venture Global compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts. How have these above catalysts been quantified?

• The bullish analysts are assuming Venture Global's revenue will grow by 23.1% annually over the next 3 years.
• The bullish analysts assume that profit margins will shrink from 19.0% today to 11.0% in 3 years time.
• The bullish analysts expect earnings to reach $2.2 billion (and earnings per share of $0.83) by about December 2028, up from $2.1 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $71.7 million.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 27.9x on those 2028 earnings, up from 7.4x today. This future PE is greater than the current PE for the US Oil and Gas industry at 13.5x.
• The bullish analysts expect the number of shares outstanding to grow by 1.18% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 9.41%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Adverse outcomes or higher than expected damages from the remaining Calcasieu Pass arbitration cases could materially exceed the current noncash reserve estimates. This could lead to cash outflows that dilute returns on large capital projects and constrain future investment, pressuring net income and consolidated adjusted EBITDA over the long term.
• If global LNG demand growth slows meaningfully below the 3% to 5% annual rates management is assuming, due to faster adoption of renewables or more aggressive decarbonization policies, Venture Global could struggle to place the 9 million to 11 million tons of excess CP2 volumes and future brownfield expansions at attractive spreads. This could compress fixed liquefaction fees and long run revenue growth.
• Persistent or structural compression of LNG spreads between TTF or JKM and Henry Hub, beyond the current winter margin compression described on the call, would erode the profitability of unsold and short to medium term cargos. This would undermine the low cost producer advantage and reduce long term net margins and earnings power.
• The aggressive build out toward more than 100 MTPA, combined with reliance on temporary power and complex power island configurations, increases execution and reliability risk across Calcasieu Pass, Plaquemines and CP2. Delays, cost overruns or extended maintenance could inflate operating costs and capital intensity, weakening returns on equity and depressing consolidated EBITDA.
• Heavy dependence on debt financed megaprojects and repeated billion dollar financings leaves the company exposed to tighter credit conditions, higher long term interest rates or reduced lender appetite for fossil fuel infrastructure. This could raise its cost of capital, slow future project sanctions and lower the present value of projected cash flows, pressuring valuation multiples and long term earnings.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The assumed bullish price target for Venture Global is $18.7, which represents up to two standard deviations above the consensus price target of $12.94. This valuation is based on what can be assumed as the expectations of Venture Global's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $20.0, and the most bearish reporting a price target of just $9.0.
  
• In order for you to agree with the more bullish analyst cohort, you'd need to believe that by 2028, revenues will be $20.2 billion, earnings will come to $2.2 billion, and it would be trading on a PE ratio of 27.9x, assuming you use a discount rate of 9.4%.
  
• Given the current share price of $6.24, the analyst price target of $18.7 is 66.6% higher. Despite analysts expecting the underlying business to decline, they seem to believe it's more valuable than what the market thinks.
  
• 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.