Golar LNG (NasdaqGS:GLNG) just locked in a fresh $1.2 billion asset backed debt facility to refinance its FLNG Gimi, freeing up roughly $400 million in net liquidity for new capital allocation decisions.
See our latest analysis for Golar LNG.
The refinancing comes after a choppy stretch, with the share price recently closing at $38.27 and a year to date share price return of minus 12.71 percent. At the same time, the five year total shareholder return sits at a robust 339.83 percent, suggesting long term faith in Golar’s LNG infrastructure strategy remains intact despite softer near term momentum.
If this kind of balance sheet reshaping has your attention, it could also be a smart moment to explore aerospace and defense stocks for other capital intensive businesses reshaping their growth profiles.
With Golar trading about 34 percent below consensus price targets but already delivering strong multi year returns, the real question now is whether this refinancing unlocked an overlooked value story or if markets already expect the next leg of growth.
Compared with the last close at $38.27, the most widely followed narrative sees Golar’s fair value materially higher, anchored in long dated FLNG cash flows.
The company has secured long-term (20-year) charters for its existing FLNG units, providing $17 billion in contracted EBITDA backlog and 20 years of cash flow visibility, which is expected to drive a significant (4x) increase in EBITDA and contracted free cash flow by 2028, indicating the market may be undervaluing its forward earnings stability and revenue growth.
Read the complete narrative.
Curious how a capital heavy LNG platform earns a growth style valuation? The narrative leans on transformative margin expansion and a bold future earnings ramp. Want to see the precise assumptions behind that jump in profitability and revenue acceleration?
Result: Fair Value of $51.10 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, this outlook hinges on sustained LNG demand and flawless execution. Overcapacity or regulatory setbacks on new FLNG projects could quickly undermine today’s optimism.
Find out about the key risks to this Golar LNG narrative.
While the narrative implies upside, the current price already bakes in a lot of optimism, with Golar trading on a price to earnings ratio of 65.5 times. That is far above both the industry at 13.8 times and peers at 27.7 times, and well ahead of a fair ratio of 18.5 times, suggesting meaningful downside if sentiment or growth expectations slip.