Golar LNG (NasdaqGS:GLNG): Exploring Valuation After Recent Share Price Weakness

Golar LNG (NasdaqGS:GLNG) shares have slipped over the past week, experiencing a bit of pressure in a market that has seen shifting sentiment across energy stocks. Investors are likely watching for clues about what might prompt a turnaround.

See our latest analysis for Golar LNG.

Golar LNG’s share price has softened recently, adding to a subdued trend since the start of the year, but that comes after a period of strong longer-term performance. Its total shareholder return is up nearly 66% over three years and an impressive 384% over five years. This suggests that while short-term momentum is fading, investors with a longer view have still seen significant gains as sentiment and underlying value have evolved.

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But with shares now well below analyst targets, the real question is whether Golar LNG is being overlooked by the market, or if current prices already reflect all of its future growth potential. Could there still be room to run?

Most Popular Narrative: 24.8% Undervalued

Golar LNG’s most closely followed narrative values the shares much higher than their recent closing price, suggesting significant upside if the projections hold true. The stage is set for a high-stakes debate about whether today's price fairly reflects the company's long-term cash flow visibility and strategic FLNG positioning.

The company has secured long-term (20-year) charters for its existing FLNG units, providing $17 billion in contracted EBITDA backlog and 20 years of cash flow visibility. This is expected to drive a significant (4x) increase in EBITDA and contracted free cash flow by 2028. These factors may indicate the market is undervaluing its forward earnings stability and revenue growth.

Read the complete narrative.

Want to know what numbers could justify this valuation premium? Behind this price target lies aggressive expansion, multi-decade contracts, and earnings metrics that rival industry heavyweights. Curious which underlying assumptions let analysts put such a bold figure on the table? Dive into the details to see the story behind this eye-catching valuation.

Result: Fair Value of $51.10 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, execution delays with new FLNG units or falling global LNG demand could quickly undermine these bullish forecasts and shift market sentiment.

Find out about the key risks to this Golar LNG narrative.

Another View: Pricing Based on Earnings Ratios

Looking at the company's current price-to-earnings ratio, Golar LNG trades at 65.8 times earnings, which is notably higher than the industry average of 13.5 and its peers' average of 42.6. The fair ratio, based on regression analysis, sits at just 23.3. This wide gap could signal investors are exposing themselves to valuation risk rather than opportunity. Is the recent optimism already built in?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Golar LNG Narrative

If you have your own perspective or approach the numbers differently, why not start building your own narrative and see where the data leads? Do it your way

A great starting point for your Golar LNG research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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