JPMorgan Starts Venture Global (VG) at Overweight

JPMorgan analyst Jeremy Tonet initiates coverage on Venture Global (NYSE: VG) with a Overweight rating and a price target of $25.00.

The analyst comments: "As we have discussed before, numerous LNG developers have faced significant delays and cost overruns (except Cheniere), whereas VG has delivered industry-leading speed to market and low cost. Venture's "design one, build many" modular approach has disrupted the industry. VG seeks to leverage secular LNG demand growth and new pro-energy policy (LNG a tool to fix trade balances) for rapid growth. While LT contracts underpin nameplate capacity, unparalleled commissioning cargoes enables the company to rapidly reinvest proceeds into future expansions. Delivering excess capacity through optimizing over nameplate and executing on brownfield bolt-on expansions, combined with partially open nameplate capacity, provides material spot and ST contract exposure, a very unique and high torque exposure to LNG spreads between the US and international markets. This dynamic provides material sensitivity to LT spread assumptions ($1/mmbtu = ~$9bn mkt cap JPMe). While acknowledging volatility and LT risk, current ~$10/mmbtu spot LNG spreads drive meaningful EBITDA uplift. Although the prospects for Russian gas reentering the European market have roiled LNG sentiment and present notable curve downside risk, we see the VG pullback as overdone and presenting an attractive entry point."

For an analyst ratings summary and ratings history on Venture Global click here. For more ratings news on Venture Global click here.

Shares of Venture Global closed at $15.96 yesterday.

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