Golar LNG Ltd. (GLNG) PT Raised to $70 at BTIG

BTIG analyst Gregory Lewis raised the price target on Golar LNG Ltd. (NASDAQ: GLNG) to $70.00 (from $67.00) while maintaining a Buy rating.

The analyst commented: "GLNG reported Q2 results this morning (BMO) with adjusted EBITDA of ~$117M coming ~16% above the Street's estimate as the Gimi ran ~15% above its ~2.7mtpa nameplate capacity while Hilli saw high commodity-linked earnings for the duration of the quarter. More importantly, GLNG reached positive FID on its fourth FLNG, a ~3.5mtpa Mk 2 unit delivering in 2029. The FLNG is expected to cost ~$700M per mtpa of capacity, which is at the lower end of liquefaction projects (onshore and offshore) that have been sanctioned over the last 1-2 years. Pricing is up 10% from Esperanza (GLNG's first Mk 2 FLNG), driven by significant cost inflation on long lead items with management calling out 40%-60% inflation on some long lead items (thinking gas turbine compression). We note the Mk 2 newbuild looks to be the only speculative FLNG on order, putting GLNG in the catbird seat as it evaluates employment opportunities. The unit represents a ~40% increase in GLNG's fleetwide liquefaction capacity and management is targeting employment that points to Capex at 5x-6x EBITDA; in line with the Esperanza's contract in Argentina. GLNG is in advanced discussions for long-term deployment for the fourth unit and called out Cameroon as one potential home for an FLNG, following the conclusion of Hilli's contract there. Bottom line: Firming up a fourth FLNG does not come as a surprise, but doing so sets GLNG up to continue growing cash flows."

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