Venture Global (VG) Following Its New LNG Deal Is The Stock Already Fully Valued
Why the new LNG agreement matters for Venture Global
Venture Global (VG) just signed a 20 year liquefied natural gas Sales and Purchase Agreement with ConocoPhillips, covering 1.0 million tonnes per year of LNG deliveries starting in 2030.
The LNG deal lands after a sharp shift in sentiment. Venture Global’s share price is up 86.93% year to date, even though the 30 day share price return is down 16.71% and the 1 year total shareholder return is 40.40%.
Scan other LNG focused plays riding similar contract momentum with our hand picked 16 nuclear energy infrastructure stocks.
Venture Global has rallied hard this year, then given back a chunk of that move. Are investors now paying for contract-backed cash flows or reacting to a mood swing around LNG sentiment, and how does that show up in the valuation work next?
Most Popular Narrative: 21% Undervalued
Venture Global’s most followed valuation story pegs fair value at $16.67 per share, compared with the last close of $13.16. As a result, the LNG contract sits inside a framework that already views the stock as undervalued on a discounted cash flow basis using a 7.96% discount rate.
Rapid ramp up of Plaquemines and CP2 production, with proven ability to operate meaningfully above nameplate capacity, should drive sustained volume growth and materially higher revenue and EBITDA as additional trains reach COD.
See why 14 investors see Venture Global as 21% undervalued.
Result: Fair Value of $16.67 (UNDERVALUED)
Still, the Venture Global story can break if arbitration at Calcasieu Pass absorbs more cash than expected, or if LNG supply growth crushes liquefaction fee economics.
Find out about the key risks to this Venture Global narrative.
Next Steps
If this LNG narrative feels pulled in two directions, with contract upside on one side and arbitration risk on the other, move quickly and test the story against your own framework by weighing the 4 key rewards and 3 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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