Venture Global stock: Wall Street starts coverage on LNG exporter after IPO

Investing.com -- A slate of Wall Street firms initiated research coverage on shares of Venture Global Inc (NYSE:VG), the LNG exporter that went public via an IPO last month.

Goldman Sachs (NYSE:GS) started VG coverage with a Buy rating and a $29 price target, citing the company’s unique construction and operating model, which allows for faster project timelines and potential upside from uncontracted production.

Goldman highlighted VG's ability to capture spreads between low US gas prices and higher international prices as a key earnings driver, despite potential volatility later in the decade.

"VG has a unique approach to its liquefaction facilities: construct small, modular scale liquefaction trains to accelerate time to market," Goldman analysts said in a note.

JPMorgan (NYSE:JPM) also took a bullish stance, initiating coverage with an Overweight rating and a $25 price target.

The firm’s analysts emphasized VG's rapid project execution and the potential for near-term gains from strong LNG spreads.

They noted the firm's innovative "design one, build many" approach, which uses modular construction to accelerate project completion and cash flow generation.

JPMorgan sees the recent pullback in VG shares as “overdone and presenting an attractive entry point.”

RBC Capital Markets started coverage with an Outperform rating and a $20 price target. Like other firms, RBC analysts also highlighted VG's modular approach, which they believe gives the company a cost and timeline advantage.

They also pointed out the firm's vertically integrated operations, which could support higher margins and greater operational efficiency.

Citi took a more cautious view, launching coverage with a Neutral/High Risk rating and an $18 price target.

Analysts acknowledged VG's aggressive growth plans and potential to generate strong cash flows through its rapid construction process. However, Citi expressed concerns about possible margin pressure in a forecasted LNG oversupply starting in 2027.

“An open contract position is a double-edged sword; we forecast global LNG oversupply beginning in 2027, which may result in compressed margins and increased earnings volatility,” Citi’s team warned.

VG's ratings on Wall Street currently stand at 11 Buys, 18 Neutrals, and 1 Sell, reflecting a mixed sentiment on the stock following its January IPO.