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Cheniere Energy (LNG) Surges 6.1%: Is This an Indication of Further Gains?

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Cheniere Energy (LNG - Free Report) shares soared 6.1% in the last trading session to close at $73.27. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 5.6% gain over the past four weeks.

Optimism around natural gas fundamentals stemming from the commodity’s increased usage due to frigid temperatures primarily drove the stock higher. The ongoing strength in liquefied natural gas (“LNG”) feedgas deliveries also contributed to the strength in Cheniere Energy, which is the largest U.S. exporter of the fuel.

Price and Consensus

Price Consensus Chart for Cheniere Energy

This natural gas company is expected to post quarterly earnings of $0.73 per share in its upcoming report, which represents a year-over-year change of -49%. Revenues are expected to be $3.15 billion, up 16.3% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Cheniere Energy, the consensus EPS estimate for the quarter has been revised 15.3% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on LNG going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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