The firm said it initiated coverage on the company, which owns and operates liquefied natural gas carriers and floating storage regasification units, based on its belief that its discounted cash flow analysis suggests that many projects may not be reflected in the Golar's current valuation.
"Our base case, which appears likely given progress to date, is the underpinning of our price target and suggests 32% upside from current levels, thus our "buy,"" the firm said.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
Shares of Golar LGN are higher by 0.88% to $50.50 in pre-market trading this morning.
Separately, TheStreet Ratings team rates GOLAR LNG LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate GOLAR LNG LTD (GLNG) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to its closing price of one year ago, GLNG's share price has jumped by 33.47%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels.
- GLNG, with its decline in revenue, underperformed when compared the industry average of 6.7%. Since the same quarter one year prior, revenues fell by 26.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- GOLAR LNG LTD has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, GOLAR LNG LTD reported lower earnings of $1.58 versus $11.66 in the prior year. For the next year, the market is expecting a contraction of 105.1% in earnings (-$0.08 versus $1.58).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 141.1% when compared to the same quarter one year ago, falling from $58.97 million to -$24.23 million.
- You can view the full analysis from the report here: GLNG Ratings Report