Is Cheniere Energy Partners Fairly Priced After LNG Export News and Recent Share Price Drop?

• Wondering whether Cheniere Energy Partners is a bargain or overpriced? Let’s dive into what really matters for value-focused investors like you.
• The stock has climbed 10.8% over the past year. However, recent weeks tell a slightly different story, with a 4.1% dip in the last seven days and a year-to-date loss of 6.3%.
• News around the liquid natural gas market, with shifting export volumes and global energy demand, has been driving much of the price action. There is also increased attention on energy infrastructure and U.S. LNG exports, which adds both intrigue and uncertainty to the mix.
• Cheniere Energy Partners nabs a 2 out of 6 on our value checks. Even traditional metrics can miss the full picture, so keep reading for a breakdown on valuation and a look at smarter ways to size up the company’s true worth.

Cheniere Energy Partners scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Cheniere Energy Partners Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's value by projecting its future cash flows and discounting them back to today’s dollars. This provides an intrinsic value that reflects long-term earning potential. For Cheniere Energy Partners, the DCF model uses a 2 Stage Free Cash Flow to Equity approach.

At present, Cheniere Energy Partners generates approximately $2.58 billion in free cash flow. According to analysts, cash flows are anticipated to fluctuate over the coming years, with a projection for 2029 of roughly $1.35 billion. Estimates beyond five years are extrapolated, and forecasts extending to 2035 show a continued decrease before stabilizing, all in USD.

This valuation approach concludes that the fair value per share is $46.46. Comparing this intrinsic value to the current share price, the DCF analysis indicates the stock trades at a 12.3% premium. This suggests it is overvalued based on these future cash flow estimates.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Cheniere Energy Partners may be overvalued by 12.3%. Discover 832 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Cheniere Energy Partners.

Approach 2: Cheniere Energy Partners Price vs Earnings

The Price-to-Earnings (PE) ratio is often the go-to metric when valuing consistently profitable companies like Cheniere Energy Partners. This ratio helps investors gauge whether a stock's price makes sense relative to the company’s actual earnings, making it a solid baseline for investment decisions.

However, not all PE ratios are the same. Companies expected to grow faster, with stable earnings and less risk, typically justify higher PE ratios. In contrast, slower growth prospects or added uncertainty generally lead to a lower “normal” or “fair” PE.

Cheniere Energy Partners is currently trading at a PE ratio of 12.7x, which is essentially in line with the broader Oil and Gas industry average of 12.6x. In comparison, its peers average a somewhat higher 16.9x, possibly reflecting differences in growth or perceived risk profiles.

To provide clearer insight, Simply Wall St calculates a proprietary “Fair Ratio” for each stock. For Cheniere Energy Partners, the Fair Ratio is 17.0x. This figure combines a range of factors unique to the company, such as forecasted earnings growth, risk, profit margins, its position in the industry, and market cap, offering a more tailored benchmark than using raw peer or industry averages.

By comparing Cheniere’s actual PE of 12.7x with its Fair Ratio of 17.0x, the measure indicates that the stock appears undervalued and may present an opportunity for value-minded investors.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1409 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Cheniere Energy Partners Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is a story you tell about a company that connects your perspective on where the business is headed with the numbers behind it, such as future revenue, earnings, and margins. Narratives let you tie together what you believe about Cheniere Energy Partners with a financial forecast, resulting in an estimated fair value that is personal and transparent.

Narratives are a simple yet powerful tool available on Simply Wall St’s Community page, already trusted by millions of investors. By linking a company's story to your outlook on its financials, Narratives help you decide whether to buy or sell by comparing your calculated fair value to the current market price. In addition, these Narratives update dynamically in response to news or earnings releases, so your views can stay aligned with what’s happening now.

For example, right now some investors see massive upside for Cheniere Energy Partners with fair values as high as $60 per share, while others are far more cautious and set their fair values closer to $40, showing just how flexible Narratives can be in capturing different perspectives.

Do you think there's more to the story for Cheniere Energy Partners? Head over to our Community to see what others are saying!

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com