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Reasons Why You Should Hold Cheniere Partners (CQP) Stock
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Cheniere Energy Partners, L.P. (CQP - Free Report) has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days.
The company, currently carrying a Zacks Rank #3 (Hold), has gained 5% in the past three months compared with 1.4% growth of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
Factors Favoring the Stock
Long-term and fixed-fee contracts with clients provide Cheniere Partners a steady revenue source. Hence, the partnership is least exposed to commodity price fluctuations and generates stable fee-based revenues from the large-scale liquefied natural gas (LNG) export facility via contracts.
Cheniere Partners is the largest LNG producer and exporter in the United States. As most industries are seeking ways to lower emissions, the demand for LNG is expected to grow significantly. This will enable the partnership to make massive profits from its export facility.
LNG demand from major Asia economies is likely to rise in the coming days, which will boost the demand for Cheniere Partners’ assets. The partnership is well-positioned to capitalize on the rising LNG demand as it is expected to surpass growth of other hydrocarbons over the next 10-15 years.
For 2023, the partnership projects its guidance for distribution per unit at $4-$4.25. Declining costs and expenses will aid Cheniere Partners’ bottom line. This implies that the partnership is thriving since it can afford to pay more of its profits to shareholders.
The partnership has economic hedges to secure natural gas feedstock for liquefaction projects, which will provide a cushion to its bottom line from volatile commodity prices.
Thus, Cheniere Partners stock appears to be a solid bet, based on the compelling business prospects.
What’s Holding Back the Stock?
As of Mar 31, 2023, Cheniere Partners had $834 million in cash and cash equivalents and a net long-term debt of $16,145 million. Considering the current market challenges, it is likely that the partnership will face difficulties in paying a portion of the long-term debt. Compared to composite stocks belonging to the industry, Cheniere Partners has considerably more exposure to debt capital, which is concerning.
Seadrill is a market-leading international driller with strong exposure in key strategic basins like the U.S. Gulf of Mexico, Brazil and Angola. SDRL reported first-quarter 2023 earnings of 83 cents per share, beating the Zacks Consensus Estimate of earnings of 55 cents per share.
Seadrill has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for SDRL’s 2023 and 2024 earnings is pegged at $2.93 per share and $4.01 per share, respectively.
Evolution Petroleum is an independent energy company. EPM reported first-quarter 2023 earnings of 42 cents per share, beating the Zacks Consensus Estimate of earnings of 17 cents per share.
Evolution Petroleum has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for EPM’s 2023 and 2024 earnings is pegged at $1.11 and $1.05 per share, respectively.
PHX Minerals is an oil and natural gas mineral company. The company posted first-quarter 2023 earnings of 11 cents per share, beating the Zacks Consensus Estimate of earnings of 7 cents per share.
PHX has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for the company’s 2023 and 2024 earnings per share is pegged at 30 cents and 55 cents, respectively.
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Reasons Why You Should Hold Cheniere Partners (CQP) Stock
Cheniere Energy Partners, L.P. (CQP - Free Report) has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days.
The company, currently carrying a Zacks Rank #3 (Hold), has gained 5% in the past three months compared with 1.4% growth of the composite stocks belonging to the industry.
Image Source: Zacks Investment Research
Factors Favoring the Stock
Long-term and fixed-fee contracts with clients provide Cheniere Partners a steady revenue source. Hence, the partnership is least exposed to commodity price fluctuations and generates stable fee-based revenues from the large-scale liquefied natural gas (LNG) export facility via contracts.
Cheniere Partners is the largest LNG producer and exporter in the United States. As most industries are seeking ways to lower emissions, the demand for LNG is expected to grow significantly. This will enable the partnership to make massive profits from its export facility.
LNG demand from major Asia economies is likely to rise in the coming days, which will boost the demand for Cheniere Partners’ assets. The partnership is well-positioned to capitalize on the rising LNG demand as it is expected to surpass growth of other hydrocarbons over the next 10-15 years.
For 2023, the partnership projects its guidance for distribution per unit at $4-$4.25. Declining costs and expenses will aid Cheniere Partners’ bottom line. This implies that the partnership is thriving since it can afford to pay more of its profits to shareholders.
The partnership has economic hedges to secure natural gas feedstock for liquefaction projects, which will provide a cushion to its bottom line from volatile commodity prices.
Thus, Cheniere Partners stock appears to be a solid bet, based on the compelling business prospects.
What’s Holding Back the Stock?
As of Mar 31, 2023, Cheniere Partners had $834 million in cash and cash equivalents and a net long-term debt of $16,145 million. Considering the current market challenges, it is likely that the partnership will face difficulties in paying a portion of the long-term debt. Compared to composite stocks belonging to the industry, Cheniere Partners has considerably more exposure to debt capital, which is concerning.
Key Picks
Some better-ranked players in the energy space are Seadrill Limited (SDRL - Free Report) , Evolution Petroleum Corporation (EPM - Free Report) and PHX Minerals Inc. (PHX - Free Report) . SDRL and EPM currently sport a Zacks Rank of 1 (Strong Buy), and PHX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Seadrill is a market-leading international driller with strong exposure in key strategic basins like the U.S. Gulf of Mexico, Brazil and Angola. SDRL reported first-quarter 2023 earnings of 83 cents per share, beating the Zacks Consensus Estimate of earnings of 55 cents per share.
Seadrill has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for SDRL’s 2023 and 2024 earnings is pegged at $2.93 per share and $4.01 per share, respectively.
Evolution Petroleum is an independent energy company. EPM reported first-quarter 2023 earnings of 42 cents per share, beating the Zacks Consensus Estimate of earnings of 17 cents per share.
Evolution Petroleum has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 60 days. The consensus estimate for EPM’s 2023 and 2024 earnings is pegged at $1.11 and $1.05 per share, respectively.
PHX Minerals is an oil and natural gas mineral company. The company posted first-quarter 2023 earnings of 11 cents per share, beating the Zacks Consensus Estimate of earnings of 7 cents per share.
PHX has witnessed upward earnings estimate revisions for 2023 and 2024 in the past 30 days. The consensus estimate for the company’s 2023 and 2024 earnings per share is pegged at 30 cents and 55 cents, respectively.