A Look At Capital Clean Energy Carriers (CCEC) Valuation After New LNG Carrier Order And Contracted Revenue Support

Capital Clean Energy Carriers (CCEC) has ordered three latest technology LNG carriers from HD Hyundai Samho in South Korea, a US$769.5 million commitment that extends its LNG-focused growth plan into 2028 and 2029.

See our latest analysis for Capital Clean Energy Carriers.

CCEC shares last closed at US$20.69. While the 1 day share price return of 1.37% and year to date share price return of 1.37% suggest only modest short term momentum, the 5 year total shareholder return of 158.54% points to a strong longer term record that frames this latest LNG carrier order as another event investors are weighing against an already substantial performance history.

If this kind of targeted LNG expansion has caught your attention, it could be a good moment to broaden your watchlist with aerospace and defense stocks as another pocket of transport and infrastructure exposure to review.

With CCEC trading at US$20.69 and sitting about 25% below the US$25.80 analyst price target, combined with a long LNG orderbook and US$3.0b of contracted revenue, is this a mispriced opportunity or is future growth already in the share price?

Most Popular Narrative: 19.8% Undervalued

With Capital Clean Energy Carriers last closing at US$20.69 versus a narrative fair value of US$25.80, the current price sits below the implied level that underpins the widely followed view on the stock.

The company is set to benefit from strong multi-year policy support for clean energy transportation and heightened demand for LNG and other low/zero-carbon fuels, as evidenced by a surge in new long-term sale and purchase agreements (SPAs) and live tenders out to 2028, which underpin future revenue growth and earnings visibility.

Read the complete narrative.

Curious what kind of revenue ramp, margin path and future P/E multiple need to line up for that price to make sense? The narrative leans on specific growth forecasts, a tight earnings range and a higher future earnings multiple than the broader shipping space. If you want to see exactly how those moving parts fit together, the full valuation story is worth a read.

Result: Fair Value of $25.8 (UNDERVALUED)

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

However, the story could change quickly if floating rate debt keeps funding costs high or if newbuild vessels fail to secure long-term employment.

Find out about the key risks to this Capital Clean Energy Carriers narrative.

Another View: Our DCF Model Points the Other Way

While the analyst narrative points to CCEC being 19.8% undervalued versus a US$25.80 fair value, the Simply Wall St DCF model lands in a very different place. On that approach, CCEC at US$20.69 is trading well above an estimated fair value of US$12.84, which implies downside risk rather than upside.

If one framework suggests upside and another flags a potential overvaluation, which set of assumptions about growth, margins and discount rates do you find more realistic for a capital intensive LNG shipowner with floating rate debt?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Capital Clean Energy Carriers for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 880 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Capital Clean Energy Carriers Narrative

If you see the numbers differently or prefer to test your own assumptions, use the same data to build a custom view in minutes with Do it your way.

A great starting point for your Capital Clean Energy Carriers research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If CCEC has sharpened your focus, do not stop here. The right mix of other opportunities could reshape how you build your next round of investments.

• Spot potential mispricings early by scanning these 880 undervalued stocks based on cash flows that might align with your view on discounted cash flows and future earnings power.
• Explore the intersection of healthcare and technology by checking out these 29 healthcare AI stocks where data, diagnostics and algorithms all meet.
• Consider digital asset themes through these 79 cryptocurrency and blockchain stocks if you want equity exposure to blockchain infrastructure and payment ecosystems.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com