Golar LNG (Buy, TP: USD17.00) - Tailwinds offsetting NFE decline
We have updated our model to include the planned additional output from Hilli from 2022, improved LNGC freight markets and strong oil price, in our view set to add near-term EBITDA. Thus, we believe the fundamental drivers for Golar LNG’s business are headed in the right direction, but the valuation is seeing headwinds from the recent decline in NFE’s share price, keeping in mind that its lock-up is over. Ahead of Q2 (report due pre-market on 9 August), we reiterate our BUY but have cut our target price to USD17 (18).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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