What Are Analysts Saying About Cheniere Energy, Inc.'s (NYSEMKT:LNG) Long Term Outlook?

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Cheniere Energy, Inc.'s (NYSEMKT:LNG) latest earnings announcement in December 2018 signalled that the company finally turned profitable after negative earnings on average over the past couple of years. Below is my commentary, albeit very simple and high-level, on how market analysts view Cheniere Energy's earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for Cheniere Energy

Market analysts' consensus outlook for next year seems optimistic, with earnings increasing by a robust 28%. This growth in earnings is expected to continue at an exponential rate, bringing the bottom line up to US$1.4b by 2022.

Although it’s helpful to be aware of the growth each year relative to today’s value, it may be more insightful estimating the rate at which the company is growing every year, on average. The pro of this approach is that we can get a better picture of the direction of Cheniere Energy's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 27%. This means, we can expect Cheniere Energy will grow its earnings by 27% every year for the next few years.

Next Steps:

For Cheniere Energy, I've put together three important factors you should further examine:

1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Valuation: What is LNG worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether LNG is currently mispriced by the market.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of LNG? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.