On Wednesday, Stephens made an optimistic move on shares of Excelerate Energy Inc (NYSE:EE), raising the price target to $36.00 from the previous $28.00, while reaffirming an Overweight rating on the stock.
The firm's decision reflects confidence in the company's growth trajectory within the global LNG market. The optimism appears well-founded, as InvestingPro data shows the stock has delivered an impressive 96.76% return year-to-date and is currently trading near its 52-week high of $31.89.
The analyst at Stephens highlighted Excelerate Energy's unique position, noting it as the only company with an uncommitted newbuild floating storage regasification unit (FSRU) currently under construction. This strategic asset places the company at the forefront of the LNG infrastructure sector.
In addition to the newbuild FSRU, Excelerate Energy has outlined a robust pipeline of projects. The company has 12 prioritized projects with anticipated start dates ranging from 2025 to 2029, which are expected to contribute significantly to its growth.
The firm also commended Excelerate Energy's strong financial standing. With an undrawn revolver and $608 million in cash reserves, the company boasts what the analyst described as a "fortress balance sheet." These financial resources are seen as a solid foundation for the company's ambitious expansion plans.
InvestingPro analysis supports this view, revealing a strong current ratio of 4.12 and a "GOOD" overall Financial Health Score. Get access to 12 more exclusive ProTips and comprehensive financial metrics with InvestingPro.
The raised price target represents a 29% increase and is based on the expectation that Excelerate Energy's stock will achieve an enterprise value to estimated 2026 EBITDA (EV/2026E EBITDA) multiple of 10.2 times. This is slightly below the average of 10.6 times for the LNG infrastructure peer group, suggesting a conservative yet positive outlook on the company's valuation.
According to InvestingPro's Fair Value analysis, the stock appears undervalued, with current EBITDA at $298.01M and a market capitalization of $3.21B.
In other recent news, Excelerate Energy has reported a robust Q3 2024 performance. The company announced an adjusted EBITDA of $92 million, which is a 4% increase from the previous quarter. Additionally, the quarterly dividend has been raised to $0.06 per share, reflecting confidence in the company's cash generation abilities and strong financial position.
Excelerate Energy's strategic focus on its FSRU and terminals business is supported by a contract portfolio that is expected to generate approximately $4 billion in future revenue. The company has secured a 15-year LNG deal with Petrobangla and a 20-year agreement with Venture Global. Furthermore, it is exploring LNG infrastructure opportunities in Vietnam and Alaska.
Excelerate Energy has raised its 2024 adjusted EBITDA guidance to be between $335 million and $345 million. The company also has a two-year $50 million share repurchase program, of which $28 million has already been utilized. These recent developments indicate a strong financial position and a clear vision for future growth.
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