were surging Friday after the stock was upgraded by Credit Suisse analysts, who cited optimism over the natural-gas producer’s future projects and increased demand for liquefied natural gas.
Analyst Spiro Dounis raised his rating for the stock to Outperform from Neutral, and lifted his price target $8 a share from $5.50.
Dounis outlined three factors driving the upgrade. The first is that Tellurian (ticker: TELL) is months away from wrapping up its financing for its liquefied natural gas production and export terminal in Louisiana. Tellurian estimated that the terminal will be able to export more than 27 million tonnes of liquefied natural gas a year to customers worldwide.
The current conflict in Ukraine could also present an opportunity for Tellurian. As European countries seek to reduce dependence on Russian oil and gas, there may be renewed interest in the company’s LNG products, Dounis said. Tellurian could fast-track its next phase of expansion to keep up with demand, he added.
Gas prices are well above historical averages, which are a boon to Tellurian, Dounis added.
“We expect prices to normalize over time but several forces could keep prices at a premium,” he wrote.
For one, increasing carbon dioxide prices could drive demand for natural gas over coal. The Ukraine-Russia war could also contribute to sustaining higher prices, he added.
Tellurian stock was up 18% to $6.27 on Friday. The shares have surged 104% this year alone, and 152% over a 12-month period. Five of the eight analysts covering the stock polled by FactSet rated it a Buy, and only one rated it a Sell.
Tellurian Stock Is Upgraded Amid Rising Demand for Liquefied Natural Gas
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A natural gas processing plant.
Dreamstime
Shares of
Tellurian
were surging Friday after the stock was upgraded by Credit Suisse analysts, who cited optimism over the natural-gas producer’s future projects and increased demand for liquefied natural gas.
Analyst Spiro Dounis raised his rating for the stock to Outperform from Neutral, and lifted his price target $8 a share from $5.50.
Dounis outlined three factors driving the upgrade. The first is that Tellurian (ticker: TELL) is months away from wrapping up its financing for its liquefied natural gas production and export terminal in Louisiana. Tellurian estimated that the terminal will be able to export more than 27 million tonnes of liquefied natural gas a year to customers worldwide.
The current conflict in Ukraine could also present an opportunity for Tellurian. As European countries seek to reduce dependence on Russian oil and gas, there may be renewed interest in the company’s LNG products, Dounis said. Tellurian could fast-track its next phase of expansion to keep up with demand, he added.
Gas prices are well above historical averages, which are a boon to Tellurian, Dounis added.
“We expect prices to normalize over time but several forces could keep prices at a premium,” he wrote.
For one, increasing carbon dioxide prices could drive demand for natural gas over coal. The Ukraine-Russia war could also contribute to sustaining higher prices, he added.
Tellurian stock was up 18% to $6.27 on Friday. The shares have surged 104% this year alone, and 152% over a 12-month period. Five of the eight analysts covering the stock polled by FactSet rated it a Buy, and only one rated it a Sell.
Write to Sabrina Escobar at [email protected]
Source: https://www.barrons.com/articles/tellurian-tell-stock-upgrade-liquefied-natural-gas-lng-demand-51648828754?siteid=yhoof2&yptr=yahoo