On Friday, B.Riley maintained a Buy rating on shares of Golar LNG Ltd . (NASDAQ: NASDAQ:GLNG), with a price target of $35.50. The firm's position follows Golar LNG's announcement of a definitive 20-year agreement with Pan American Energy for the deployment of a Floating Liquefied Natural Gas (OTC:LNGLF) (FLNG (OL:FLNG)) vessel in Argentina.
The project is set to utilize resources from the Vaca Muerta shale formation located in the Neuquina Basin, recognized as the world's second-largest shale gas resource. Golar LNG expects to initiate production from this venture in 2027.
The sustained Buy rating reflects confidence in the company's strategic move to capitalize on the abundant shale gas reserves of the Vaca Muerta formation. The collaboration with Pan American Energy represents a significant step for Golar LNG in expanding its operations and presence in the global energy sector.
The FLNG vessel is poised to play a crucial role in the processing and production of natural gas, aligning with the increasing demand for cleaner energy sources. The 20-year timeframe of the agreement indicates a long-term commitment to the project and potential for extended revenue generation.
The announcement comes as a strong indicator of Golar LNG's future prospects and growth trajectory. With the commencement of the FLNG project slated for 2027, the company is positioned to enhance its portfolio and strengthen its market standing in the liquefied natural gas industry.
In other recent news, Golar LNG has shown a strong financial performance in Q1 2024, with reported operating revenues of $65 million, net income of $66 million, and an adjusted EBITDA of $64 million. The company has also reinstated dividends and a share buyback program, demonstrating its commitment to shareholder returns.
In addition, Golar LNG has secured a 20-year agreement with Pan American Energy to deploy a Floating Liquefied Natural Gas (FLNG) vessel in Argentina, aiming to export liquefied natural gas by 2027.
In terms of analyst feedback, BTIG raised its share price target for Golar LNG to $45.00, maintaining a Buy rating, and Stifel increased its price target to $55.00. These updates reflect optimism about the company's operations, including the re-contracting of its Hilli FLNG unit and the final investment decision on its first Mark II FLNG.
Golar LNG is also advancing its FLNG operations with plans to expand its fleet and is in advanced negotiations for the Mark II FLNG project. Other recent developments include the planned separation of Macaw Energies into a standalone entity in 2024.
Golar LNG's strong liquidity position, with $700 million in cash and $550 million in net debt, supports these strategic initiatives. The company anticipates an additional $150 million EBITDA from the Gimi charter with BP (NYSE:BP).
InvestingPro Insights
As B.Riley reaffirms its Buy rating on Golar LNG Ltd. (NASDAQ: GLNG), with the recent FLNG agreement in Argentina poised to bolster the company's long-term prospects, a glance at the real-time data from InvestingPro provides further context for investors.
With a market capitalization of $3.49 billion and a price-to-earnings (P/E) ratio standing at 31.63, Golar LNG trades at a significant earnings multiple. The company's revenue has seen a growth of 7.68% in the last twelve months as of Q1 2024, despite a quarterly dip of -12.18%. Moreover, the gross profit margin remains robust at 57.26%, reflecting efficient operations.
InvestingPro Tips highlight that management's aggressive share buybacks and the anticipation of net income growth this year could signal confidence in the company's financial health. Moreover, the company has delivered a high return over the past year, with a 51.54% total price return, closely approaching its 52-week high. These insights suggest a solid performance, albeit with the note that analysts have recently revised their earnings expectations downwards for the upcoming period.
For readers interested in a deeper dive into Golar LNG's financials, there are 15 additional InvestingPro Tips available, which could provide a more nuanced understanding of the company's valuation and potential. To access these insights and more, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at InvestingPro.
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