Venture Global (VG) On Its $1.5b Shipping Loan And The Case For Undervaluation

Venture Global (VG) is back in focus after its shipping subsidiary closed a senior secured term loan facility of up to US$1.5b, tied to the acquisition of nine LNG carriers and related reserves.

See our latest analysis for Venture Global.

Despite the funding news and recent headlines around higher liquefaction fees and geopolitical tension, Venture Global’s share price has been choppy, with a 7 day share price return of 9.97% but a 1 year total shareholder return that is down 31.08%.

If this LNG story has your attention, it may be worth scanning for other energy infrastructure opportunities through 89 nuclear energy infrastructure stocks

The recent bounce in Venture Global after funding its LNG fleet and benefiting from higher liquefaction fees still sits against a 1 year return that is down sharply. Is most of the rerating already used up, or is there clear upside left as valuation comes into focus next?

Most Popular Narrative: 42.4% Undervalued

The most followed narrative on Venture Global sees fair value at $21.24 compared with the last close of $12.24, putting the focus squarely on how future LNG volumes and contracts might support that gap.

Growing portfolio of 20 year SPAs with European and global utilities, combined with large volumes of uncontracted “excess” output for medium and short term sales, creates a blended revenue mix with high visibility base cash flows and meaningful upside to liquefaction fees. This underpins consolidated adjusted EBITDA growth.

Read the complete narrative.

Want to see what is baked into that $21.24 fair value for Venture Global? The narrative leans heavily on long term LNG contracts, rising volumes and a richer margin profile, plus a valuation multiple more typical of faster growing sectors.

Result: Fair Value of $21.24 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Venture Global’s story also hinges on outcomes that may not break its way, including arbitration liabilities and the ability to refinance large project debt on workable terms.

Find out about the key risks to this Venture Global narrative.

Next Steps

With the Venture Global story split between risks and rewards, it makes sense to move quickly, review the data yourself, and decide what really matters for your portfolio by weighing up the 4 key rewards and 2 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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