Your stocks to watch for the week ahead are LNG stocks Cheniere Energy, Flex LNG, Golar LNG, New Fortress Energy and Excelerate Energy.
With the market in a confirmed uptrend and a "wait and see" mentality around whether the Federal Reserve will hike rates by 75 basis points this coming week, these five LNG stocks are worth keeping tabs on for investors looking to add energy exposure to their portfolios.
Global energy prices have been volatile in recent weeks amid fears of recession and possible oil and gas demand destruction in the forecasts. Since Russia invaded Ukraine earlier this year, both U.S. crude oil and natural gas futures have hit highs and then retreated before rebounding this week.
Meanwhile, Europe has been busy finding alternative energy sources to replace Russia to fill its gas storage for the winter. Europe's stores reached around 94% capacity this week which led Amsterdam spot prices to go negative, as liquefied natural gas tankers waited outside of European ports.
In 2021, Russia provided nearly half the European Union's gas imports. So far in 2022, more than 70% of total U.S. LNG cargoes have gone to Europe, compared with 34% in 2021, according to federal data.
The U.S. is the world's top natural gas producer and it is gearing up to bring more LNG shipping capacity online with the Freeport LNG export plant set to restart operations in November.
While Europe's gas storage is currently near full, cold weather this winter could keep demand high and LNG stocks with shipping assets essential.
Demand for LNG in Europe and Asia should remain strong.
LNG Stocks: Cheniere Energy Stock
LNG shares rose 0.2% to 174.48 during Friday's market trading. On the week, the stock dropped 0.75%. Shares have reclaimed the 10-week moving average and have formed a cup-with-handle pattern with a 178.69 buy point, according to MarketSmith analysis. The buy range extends from 160.30 to 176.33.
Houston-based Cheniere Energy is the largest producer of liquefied natural gas in the U.S. and one of the largest LNG operators in the world. Its services range from gas procurement and transport to vessel chartering and delivery. Cheniere owns and operates liquefied natural gas terminals near Corpus Christi, Texas.
The U.K. government recently confirmed that it is in talks for an LNG purchase agreement with a number of companies, including Cheniere.
In the first half of 2021, less than 40% of Cheniere's cargoes of LNG landed in Europe. That jumped to more than 70% through this year's second quarter, even as the company ramped up new export capacity. The urgency of Europe's natural gas shortage only intensified last month. That is when an explosion disabled the Nord Stream 1 pipeline from Russia that had once supplied 40% of the European Union's natural gas.
In Q2, sales increased 165% to $8 billion and LNG earned $2.90 per share, up from a net loss of $1.30 per share in Q2 2021.
The company will report Q3 earnings on Nov. 3, with analysts predicting earnings ballooning to $5.55 per share, up from a loss of $4.27 a year ago. Revenue is expected to surge 141% to $7.7 billion, according to FactSet.
LNG stock has a Composite Rating of 82. It has a 97 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share price movement with a 1 to 99 score. The rating shows how a stock's performance over the last 52 weeks holds up against all the other stocks in IBD's database. The EPS rating is 41.
LNG stock is on IBD Leaderboard.
Flex LNG Stock
Flex LNG stock sank 4.8% to 30.80 Friday. On the week, FLNG edged up 2 cents to 30.80.
Shares are in consolidation with an official 37.09 buy point, according to MarketSmith. FLNG had fought above the 50-day moving average Tuesday, hitting 34.56 intraday but then fell back the rest of the week.
The Bermuda-based LNG transporter and processor focuses on LNG shipping with its fleet of LNG Carriers and Floating Storage Regasification Units (FSRUs). The company operates thirteen LNG carriers.
FSRUs offer added flexibility compared to traditional land-based gas terminals. In addition to transporting LNG, these vessels have the onboard capability to vaporize the LNG and deliver natural gas through both offshore and near-shore receiving facilities.
With a glut of LNG tankers forced to wait to unload at ports as European infrastructure is unable to handle the increased LNG shipments, companies with FSRU capabilities might become more popular.
In Q2, Flex LNG missed views, with EPS growing 110% to 61 cents per share and sales increasing 29% to $84.2 million. FLNG will report Q3 earnings on Nov. 15. The Street forecasts earnings increasing 28% to 77 cents per share. Sales are expected to grow 12% to $91.4 million.
LNG stock Flex LNG ranks fourth in the Oil & Gas-Transport/Pipeline industry group. FLNG has a Composite Rating of 97. Its Relative Strength Rating is 93 and it has an EPS Rating of 98.
Golar LNG
GLNG shares rose 0.4% to 27.24 Friday. On the week, the stock advanced 6.4% as it has formed a cup base with a 30.76 buy point. Since late September, GLNG has been trading below its 50-day moving average but made a strong 6.4% advance Tuesday amid high volume to retake that support. On Friday, GLNG stock found support at the 50-day line. It's possible that Golar LNG stock is starting to forge a handle, which would offer a lower entry.
Golar LNG owns and operates marine LNG infrastructure and it develops floating LNG liquefaction terminals and FSRU projects based on converting existing, traditional, LNG carriers.
The company reports third-quarter earnings on Nov. 16. Wall Street forecasts EPS of 31 cents, up from a loss of 84 cents a year ago. Revenue is predicted to fall 33% to $71.2 million.
Hamilton, Bermuda-based Golar LNG reported in August that it earned 29 cents per share in the second quarter, a steep jump over a loss of 17 cents per share in Q2 2021, according to FactSet. Total sales fell 16% to $86.1 million in the second quarter.
GLNG reported first-quarter financial results well below analysts' expectations. The global LNG shipping company announced a loss of 35 cents per share and revenue of $79.7 million.
LNG stock GLNG has a 93 Composite Rating out of 99. It has a 98 Relative Strength Rating. The EPS rating is 79.
New Fortress Energy Stock
NFE stock dipped 3 cents to 54.53 Friday, shooting up 7.5% for the week. The stock has a cup pattern with a 63.16 buy point, though a handle would be nice to see. Shares have steadily been on an upward trend since New Fortress Energy hit recent lows of 42.12 on Oct. 13. NFE stock reclaimed the 50-day moving average on Tuesday and added to gains Wednesday.
The New York-based liquefied natural gas business was founded in 2014 and has operations in the U.S., Caribbean, Europe and Latin America. NFE works on energy infrastructure and develops, finances and operates natural gas facilities.
NFE reports third-quarter earnings on Nov. 8 with analysts expecting earnings will soar to 75 cents per share, up from a loss of 5 cents in Q3 2021. Sales are forecast to spike 202% to $569 million.
New Fortress Energy reported a net loss of 81 cents per share and revenue increased 120% to $497 million in the second quarter. New Fortress Energy has also announced it has a partnership with Plug Power for a 120 megawatt industrial-scale green hydrogen plant near Beaumont, Texas. The plant would be one of the largest green hydrogen plants in North America.
Green hydrogen is the term used for hydrogen produced using renewable power as the energy source. Hydrogen is considered a key fuel for the global energy transition, according to the World Economic Forum.
LNG stock NFE has a Composite Rating of 93. Its Relative Strength Rating is a 98 and its EPS Rating is 26.
LNG Stocks: Excelerate Energy Stock
EE stock edged up 0.9% to 26.70 Friday. On the week, Excelerate Energy shares advanced 4.6%, moving above the 50-day moving average. EE shares have formed a cup pattern with a 28.88 buy point. That cup base is next to a failed cup-with-handle base and a failed IPO base.
The stock shot up 25% since it hit recent lows on Oct. 11.
Excelerate Energy, which was founded in 2003, went public in April 2022. The stock's IPO price was $24. The Woodlands, Texas-based company is a leading operator of FSRUs. The business offers FSRU infrastructure development and it has 12 offices across the globe.
In Q2, EE missed earnings views. The company reporting a net loss of 8 cents per share while revenue came in at $623 million. The company reports third-quarter results on Nov. 9 with the Street expecting EPS of 21 cents and $492 million in sales, according to FactSet.
On Tuesday, Germany signed a five-year contract with Excelerate Energy to charter the company's FSRU to supply LNG. The agreement will begin in the first quarter of 2023.
LNG stock EE sits fourth in the Utility-Gas Distribution industry group. Excelerate Energy has a Composite Rating of 74. Its Relative Strength Rating is 88. The EPS Rating is 45.
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