Feb. 24 at 8:20 PM
Morgan Stanley downgraded its outlook on the U.S. LNG sector to Cautious, warning that a record wave of new supply could push global prices lower and pressure margins, investment, and stock performance.
The bank downgraded Cheniere Energy to Equal Weight from Overweight and cut its price target to
$236, excluding pre–final investment decision projects from its base case. It also initiated coverage of Venture Global with an Underweight rating and an
$8 price target. In contrast, it raised its target on Excelerate Energy to
$40 from
$30, citing more stable cash flows.
Morgan Stanley noted that roughly 200 million tonnes per annum (mtpa) of LNG capacity is under construction globally, set to come online between 2025 and 2030, compared with a current market of just over 400 mtpa. Annual supply additions are expected to rise from about 20 mtpa in 2025 to a peak of 36–38 mtpa in 2027–2028.
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