Chevron (CVX) Makes Waves in LNG, And It's About Time Says Analyst
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Rating Summary:
26 Buy, 12 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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On Monday, Chevron (NYSE: CVX) announced 50 percent interest in the Kitimat LNG project in British Columbia. Apache Corporation (NYSE: APA) will hold the remaining 50 percent stake, and the two will team up to operate the terminal, pipeline, and two related shale gas fields.
Commenting on developments, analysts at Dahlam Rose said the transaction expands CVX's global LNG footprint and has positive implications for the North American LNG export market.
"Chevron is clearly taking steps in the right direction," said analyst Asit Sen. "One of the key investment negatives in the CVX story has been its below-average exposure to a resurgent North America oil/gas/LNG landscape (particularly shale). The Kitimat deal clearly addresses this concern."
The deal may also have broader implications, thinks Sen.
"The Kitimat LNG project timeline has slipped due to a variety of reasons and CVX's entrance, we believe, provides a boost. CVX is a premier LNG developer and brings longstanding relationships with key Asian buyers," said Sen.
Asia accounts for 63 percent of end-market demand for LNG, one of the faster growing areas in the already hot nat-gas market.
Dahlman Rose has a Buy rating on Chevron (NYSE: CVX) with a price target of $120.00.
For an analyst ratings summary and ratings history on Chevron click here. For more ratings news on Chevron click here.
Shares of Chevron closed at $108.63 yesterday.
Commenting on developments, analysts at Dahlam Rose said the transaction expands CVX's global LNG footprint and has positive implications for the North American LNG export market.
"Chevron is clearly taking steps in the right direction," said analyst Asit Sen. "One of the key investment negatives in the CVX story has been its below-average exposure to a resurgent North America oil/gas/LNG landscape (particularly shale). The Kitimat deal clearly addresses this concern."
The deal may also have broader implications, thinks Sen.
"The Kitimat LNG project timeline has slipped due to a variety of reasons and CVX's entrance, we believe, provides a boost. CVX is a premier LNG developer and brings longstanding relationships with key Asian buyers," said Sen.
Asia accounts for 63 percent of end-market demand for LNG, one of the faster growing areas in the already hot nat-gas market.
Dahlman Rose has a Buy rating on Chevron (NYSE: CVX) with a price target of $120.00.
For an analyst ratings summary and ratings history on Chevron click here. For more ratings news on Chevron click here.
Shares of Chevron closed at $108.63 yesterday.
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