Stock Analysis

News Flash: Analysts Just Made A Sizeable Upgrade To Their Cheniere Energy, Inc. (NYSEMKT:LNG) Forecasts

  •  Updated
NYSEAM:LNG
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Cheniere Energy, Inc. (NYSEMKT:LNG) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

Following the upgrade, the most recent consensus for Cheniere Energy from its eleven analysts is for revenues of US$12b in 2021 which, if met, would be a huge 30% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting US$3.26 in per-share earnings. Prior to this update, the analysts had been forecasting revenues of US$11b and earnings per share (EPS) of US$3.26 in 2021. There's clearly been a surge in bullishness around the company's sales pipeline, even if there's no real change in earnings per share forecasts.

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AMEX:LNG Earnings and Revenue Growth March 2nd 2021

Even though revenue forecasts increased, there was no change to the consensus price target of US$79.29, suggesting the analysts are focused on earnings as the driver of value creation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Cheniere Energy at US$88.00 per share, while the most bearish prices it at US$61.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cheniere Energy's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Cheniere Energy's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 30% growth on an annualised basis. This is compared to a historical growth rate of 38% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% annually. So it's pretty clear that, while Cheniere Energy's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Cheniere Energy.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Cheniere Energy going out to 2025, and you can see them free on our platform here..

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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