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QatarEnergy is reportedly negotiating with US producers to secure liquefied natural gas through 2031. The country is looking to replace capacity lost after attacks on its infrastructure.
As the largest natural gas producer in the US, Expand Energy is well-positioned to benefit from this shift in global supply. The company was formed specifically to leverage its massive scale to supply both domestic power plants and international export markets. If these negotiations lead to long-term contracts for US gas, it would provide a steady source of demand for the company's production from the Marcellus and Haynesville regions. This supports the company's goal of generating excess cash to return to shareholders through dividends. This development reinforces the idea that US natural gas is becoming a critical global backup. For a company like Expand Energy, which produces over 7 billion cubic feet of gas per day, a tighter global market generally helps keep prices stable and supports its long-term profit margins. This is exactly the kind of demand growth the company needs to absorb its high production levels.
Source: Reuters
Raymond James held its price target at $147 this week, which is significantly higher than where the stock trades today. Stifel also set a target of $135, bringing the average analyst target across all firms to about $120. These targets reflect a belief that the market is currently undervaluing the company's scale following its recent merger. Analysts are likely looking for the company to prove it can hit its goal of $500 million in annual cost savings. While these targets are optimistic, they show that Wall Street sees a path for the stock to recover if management executes its plan to return 75 percent of excess cash to shareholders.
Source: Raymond James
Management consistently sets a bar they can clear, beating analyst expectations in seven of the last eight quarters. This track record suggests the team has a firm handle on their costs and production even as energy prices swing.
| Expectation | |
|---|---|
| EPS | $1.33 |
| Revenue | $2.91B |
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