Stock Idea Cheniere Energy’s transition into a cash flow m | FSMOne SG - Research Highlights

Stock Idea

Cheniere Energy’s transition into a cash flow machine amidst the global energy supply crunch

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• Natural gas prices have seen the largest increase against the current backdrop of strong energy demand growth and tighter supply. 

• Given the surge in the spot market prices relative to the US Henry Hub benchmark, we believe this will encourage more countries to sign long-term contracts with the US LNG providers.

• Cheniere Energy will also see an increase in total production capacity which paints a positive for its future revenue and earnings growth outlook.

• At this point, Cheniere energy has reached an inflexion point in its cash flow generation capabilities, which will support both its deleveraging and capital return plans. 

• We arrived at a target price of USD 143.0, which translates to an upside potential of almost 40% in the next two years. 

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: Cheniere Energy (NYSA:LNG)