Cheniere Energy (LNG): Assessing Valuation After a Recent Pullback in Share Price Performance

Cheniere Energy (LNG) has slipped over the past month, extending a weaker trend that now stretches into the past 3 months. As a result, investors are asking whether the pullback finally improves the risk reward setup.

See our latest analysis for Cheniere Energy.

Zooming out, the recent softness in Cheniere’s 1 month and 3 month share price returns contrasts with a much stronger 3 year and 5 year total shareholder return. This suggests momentum has cooled for now, while the longer term story remains constructive.

If Cheniere’s pullback has you rethinking your energy exposure, it could be a moment to broaden your search and explore fast growing stocks with high insider ownership.

With shares now trading well below analyst targets, yet recent earnings showing mixed growth, has Cheniere quietly slipped into undervalued territory, or is the market simply keeping a cool head and already pricing in future expansion?

Most Popular Narrative Narrative: 28.7% Undervalued

With Cheniere Energy last closing at $192.91 versus a narrative fair value near $270, the valuation case leans firmly toward upside if the assumptions hold.

In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 22.1x on those 2028 earnings, up from 13.4x today. This future PE is greater than the current PE for the US Oil and Gas industry at 12.6x.

Read the complete narrative.

Curious what kind of revenue path and profit margins could support a valuation multiple usually reserved for faster growing sectors? The narrative leans on bold assumptions about future earnings power and cash generation. Want to see which moving parts really have to fall into place for that premium multiple to stick?

Result: Fair Value of $270.67 (UNDERVALUED)

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

However, rising global LNG capacity and shifting decarbonization policies could pressure long-term pricing power and challenge the upbeat earnings and valuation narrative.

Find out about the key risks to this Cheniere Energy narrative.

Build Your Own Cheniere Energy Narrative

If you are not fully convinced by this view, or simply prefer to dig into the numbers yourself, you can quickly craft your own narrative in just a few minutes: Do it your way.

A great starting point for your Cheniere Energy research is our analysis highlighting 4 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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