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Here's Why Golar LNG (GLNG) Deserves a Place in Your Portfolio
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Golar LNG (GLNG - Free Report) is being well-served by the positivity surrounding the LNG market.
The surging inflation caused a spike in oil and natural gas prices. Moreover, amid the ongoing Russia-Ukraine war, Europe is likely to look for gas supplies outside Russia. Driven by the buoyant demand for gas in Europe due to its efforts to procure supply ahead of the winter, the freight rate to charter an LNG carrier in the Atlantic basin surged to a record high of $397,500 per day on Oct 11. This upward movement of LNG freight rates bodes well for the company.
Northward Earnings Estimates: The Zacks Consensus Estimate for fourth-quarter 2022 earnings has been revised 7.3% upward over the past 60 days. For 2022, the Zacks Consensus Estimate for earnings has moved 7% north in the same time frame. The favorable estimate revisions reflect the confidence of brokers in the stock.
Given the wealth of information at brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because the path of estimate revisions serves as an important pointer when it comes to ascertaining the stock price.
Upbeat Price Performance: Shares of GLNG have performed very well on the bourse, surging 114.6% over the past year compared with the 21% appreciation of its industry.
Image Source: Zacks Investment Research
Strong Q3 Results: Apart from the strong LNG market, Golar LNG has a stellar earnings surprise history, having outpaced the Zacks Consensus Estimate in each of the past four quarters. The average beat is 73.3%.
The latest earnings beat came in the third quarter of 2022, wherein GLNG’s earnings (on an adjusted basis) of 44 cents per share surpassed the Zacks Consensus Estimate of 24 cents per share. GLNG had incurred a loss of 1 cent per share a year ago.
Revenues of $68 million surpassed the Zacks Consensus Estimate of $66 million. The top line, however, dropped 35.2% year over year. Revenues in the Floating Liquefied Natural Gas (FLNG) segment inched up 0.7% year over year.
Vessel operating costs declined marginally on a sequential basis to $17.7 million. Administrative expenses increased 5% sequentially to $10.4 million.
The FLNG unit contributed 80% to GLNG’s top line. The shipping unit contributed 1.4% of the top line. The balance came from corporate and other sources.
Adjusted EBITDA surged 62.9% year over year to $85.2 million in the quarter. GLNG exited the September quarter with $498.2 million of cash and cash equivalents and $130.9 million of restricted cash.
Other Key Picks
Investors interested in the broader Transportation sector may also consider the following stocks:
Covenant Logistics (CVLG - Free Report) : CVLG offers a portfolio of transportation and logistics services, including asset-based expedited, dedicated and irregular route truckload capacity, besides asset-light warehousing, transportation management and freight brokerage capability.
The gradually improving freight market scenario is a tailwind to Covenant. CVLG’s cost-control efforts are appreciated as well. CVLG currently sports a Zacks Rank #1. The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 10.1% upward over the past 60 days.
Teekay Tankers (TNK - Free Report) : TNK is being well-served by the increase in tanker rates. A gradual ramp-up in economic activities also bodes well. High fuel costs are, however, weighing on the bottom line.
Teekay Tankers currently sports a Zacks Rank #1. TNK’s shares have soared 180% in a year’s time. Over the past 60 days, the Zacks Consensus Estimate for 2022 earnings has moved 87.6% north.
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Here's Why Golar LNG (GLNG) Deserves a Place in Your Portfolio
Golar LNG (GLNG - Free Report) is being well-served by the positivity surrounding the LNG market.
The surging inflation caused a spike in oil and natural gas prices. Moreover, amid the ongoing Russia-Ukraine war, Europe is likely to look for gas supplies outside Russia. Driven by the buoyant demand for gas in Europe due to its efforts to procure supply ahead of the winter, the freight rate to charter an LNG carrier in the Atlantic basin surged to a record high of $397,500 per day on Oct 11. This upward movement of LNG freight rates bodes well for the company.
Given this backdrop, let's delve deep to unearth the factors that make GLNG, currently carrying a Zacks Rank #2 (Buy), an attractive pick. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Northward Earnings Estimates: The Zacks Consensus Estimate for fourth-quarter 2022 earnings has been revised 7.3% upward over the past 60 days. For 2022, the Zacks Consensus Estimate for earnings has moved 7% north in the same time frame. The favorable estimate revisions reflect the confidence of brokers in the stock.
Given the wealth of information at brokers’ disposal, it is in the best interest of investors to be guided by their expert advice and the direction of their estimate revisions. This is because the path of estimate revisions serves as an important pointer when it comes to ascertaining the stock price.
Upbeat Price Performance: Shares of GLNG have performed very well on the bourse, surging 114.6% over the past year compared with the 21% appreciation of its industry.
Image Source: Zacks Investment Research
Strong Q3 Results: Apart from the strong LNG market, Golar LNG has a stellar earnings surprise history, having outpaced the Zacks Consensus Estimate in each of the past four quarters. The average beat is 73.3%.
The latest earnings beat came in the third quarter of 2022, wherein GLNG’s earnings (on an adjusted basis) of 44 cents per share surpassed the Zacks Consensus Estimate of 24 cents per share. GLNG had incurred a loss of 1 cent per share a year ago.
Revenues of $68 million surpassed the Zacks Consensus Estimate of $66 million. The top line, however, dropped 35.2% year over year. Revenues in the Floating Liquefied Natural Gas (FLNG) segment inched up 0.7% year over year.
Vessel operating costs declined marginally on a sequential basis to $17.7 million. Administrative expenses increased 5% sequentially to $10.4 million.
The FLNG unit contributed 80% to GLNG’s top line. The shipping unit contributed 1.4% of the top line. The balance came from corporate and other sources.
Adjusted EBITDA surged 62.9% year over year to $85.2 million in the quarter. GLNG exited the September quarter with $498.2 million of cash and cash equivalents and $130.9 million of restricted cash.
Other Key Picks
Investors interested in the broader Transportation sector may also consider the following stocks:
Covenant Logistics (CVLG - Free Report) : CVLG offers a portfolio of transportation and logistics services, including asset-based expedited, dedicated and irregular route truckload capacity, besides asset-light warehousing, transportation management and freight brokerage capability.
The gradually improving freight market scenario is a tailwind to Covenant. CVLG’s cost-control efforts are appreciated as well. CVLG currently sports a Zacks Rank #1. The stock has witnessed the Zacks Consensus Estimate for 2022 earnings being revised 10.1% upward over the past 60 days.
Teekay Tankers (TNK - Free Report) : TNK is being well-served by the increase in tanker rates. A gradual ramp-up in economic activities also bodes well. High fuel costs are, however, weighing on the bottom line.
Teekay Tankers currently sports a Zacks Rank #1. TNK’s shares have soared 180% in a year’s time. Over the past 60 days, the Zacks Consensus Estimate for 2022 earnings has moved 87.6% north.