Credit Suisse Upgrades Cheniere Energy Partners LP Holdings (CQH) to Outperform

Credit Suisse upgraded Cheniere Energy Partners LP Holdings (NYSE: CQH) from Neutral to Outperform with a price target of $28.00 (from $24.00) on valuation.

Analyst Bhavesh Lodaya commented, "We came away surprised by the termination of the acquisition of CQH by LNG, driven by a lack of agreement with its conflicts committee. While this is a setback for the new management, we continue to believe that an eventual simplification of the Cheniere group is likely (see below). Further, in its press release LNG indicated that it intends to purchase additional CQH shares (LNG owns 80.1% currently) in the open market or under privately negotiated transactions. To note the current value of CQH not owned by LNG is ~$1.0Bn. Over the last six weeks, boards of both companies were engaged in negotiations, where LNG offered to raise the conversion ratio by ~7% to 0.54 (from 0.5049 announced 9/30). We now value CQH based on a discounted DCF approach which yields a $28 target price, implying ~30% NTM total returns. This is above the median ~25% for our coverage group, supporting our upgrade to Outperform. CQH’s cash flows consist primarily of LP distributions through ownership of ~56% of CQP units."

For an analyst ratings summary and ratings history on Cheniere Energy Partners LP Holdings click here. For more ratings news on Cheniere Energy Partners LP Holdings click here.

Shares of Cheniere Energy Partners LP Holdings closed at $21.55 yesterday.

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