Golar LNG (Buy, TP: USD39.00) - No upside unless BP FLNG
Yesterday’s share price decline of ~USD9/share was equal to our Ophir valuation and the current share price already reflects an FLNG Hilli utilisation increase, hence we believe BP FLNG FID is needed for upside in the stock. The key challenge going forward would be to create certainty around FID dates in Africa following two cancelled projects and one delayed with 50% utilisation. Golar LNG guides for BP FLNG FID end- 2018, which would be the next catalyst in addition to LNG shipping market recovery and FLNG Hilli vessel utilisation rising to 100%, which seems fair to assume at USD9/mnBtu gas prices and USD80/bbl oil prices. We keep our BUY; target price cut to USD39 (USD49).Golar LNG is a midstream liquefied natural gas (LNG) company based in Bermuda. Co. is engaged in the transportation, regasification, liquefaction and trading of LNG. Through its subsidiaries and affiliates, Co. is engaged in the acquisition, ownership, operation and chartering of LNG carriers and floating storage regasification units (FSRUs), and the development of liquefaction projects such as Floating Liquefaction Natural Gas Vessels. Co. owns and operates a fleet of 19 LNG carriers and seven FSRUs, and under management agreements operates Golar LNG Partner LP's fleet of six FSRUs and four LNG carriers.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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