Credit Suisse Sees Big Upside in 2 MLPs
Credit Suisse reinstated positive coverage on the Cheniere family of companies. Cheniere Energy Inc. (NYSEMKT: LNG) was reinstated with an Outperform rating, up from Neutral, and the target price was raised to $84 from $75. The analyst firm included a 90% value from the new projects as it thinks that Cheniere is likely to proceed despite the commodity backdrop.
It is worth noting that Credit Suisse arrived at its target price, which amounts to roughly a 30% upside, whether the Corpus Christi project resides at its current level or eventually gets dropped to the Cheniere Energy Partners level. Credit Suisse considers its rating and target price a conservative valuation versus other analyst firms on the street, considering the recent broader sector re-rating and to factor in the new oil reality.
There is expected to be near-term choppiness with oil prices. However, the business should hold over the long run, given its cost competitiveness versus global projects where prices are expected to settle.
Cheniere Energy Partners L.P. Holdings LLC (NYSEMKT: CQH) was reinstated with an Outperform rating and a $27 target price. It would be given a target price of $30 if the Corpus Christi project is dropped to its level, but if the project is maintained at the Cheniere Energy level, the target price would be $23. Therefore Credit Suisse averaged these two outcomes to get the company’s $27 price target.
Credit Suisse maintained an Outperform rating for Cheniere Energy Partners L.P. (NYSEMKT: CQP) and raised its price target to $41 from $38. If the Corpus Christi project is dropped to this level, the price target would be $46. If it is not, the price target would be $36.
Shares of Cheniere Energy were down over 4% at $62.16 in the first two hours of trading Monday. The stock has a consensus analyst price target of $88.75 and a 52-week trading range of $38.42 to $85.00.
Shares of Cheniere Energy Partner Holdings were up almost 1% at $20.11. The consensus analyst price target is $29.25, and the 52-week trading range is $17.81 to $27.15.
Shares of Cheniere Energy Partners were up more than 1% at $28.22. The consensus price target is $38.00, and the 52-week trading range is $25.08 to $34.60.