Venture Global climbs after brokerages start coverage with bullish ratings

Audio By Carbonatix

Enlarge

Venture Global shares hit a one-week peak on Tuesday, after several brokerages initiated coverage with bullish ratings on the company despite its drab market debut in January.

Venture Global stock was last up 5.8% at $16.87.

The liquefied natural gas (LNG) provider began trading on the New York Stock Exchange at $24.05 per share on January 24, valuing it as the most substantial gas exporter with a market capitalization of $58.2 billion.

The company’s shares have traded below its IPO price of $25 since then, falling more than 30%, driven by investor and analyst concerns over its long-term profit estimates and ongoing legal battles involving UK energy majors BP and Shell.

J.P.Morgan, Citigroup, RBC, Guggenheim and Scotiabank were among brokerages that began coverage of the stock following the expiry of the mandated quiet period.

Analysts at J.P.Morgan, who are “overweight” on Venture Global, said the company’s strategy of “design one, build many” is an industry disrupter given its speed to market and low costs, at a time when competitors have faced numerous headwinds, including project delays and rising costs.

Guggenheim, which started with a “buy” rating, said Venture Global could emerge as the world’s largest LNG producer, helped by U.S. administration’s policy changes in favor of the energy sector and rising gas demand in Europe and the Asia Pacific region. 

On the other hand, Citigroup maintained a “neutral” rating, warning that an increase in LNG supply in the global market could offset the company’s strengths and weigh on its margins.

The latest blow to Venture Global came from France’s TotalEnergies <TTEF.PA>, which rejected an opportunity to become a long-term customer of its U.S. LNG terminals.

(Reporting by Johann M Cherian in Bengaluru; Editing by Mohammed Safi Shamsi)