A Citi Research analyst has raised his share price target for Cheniere Energy Inc. and reiterated his “Buy” rating after the Houston company said it is starting construction on a natural gas export terminal.
Analyst Faisel Khan on Friday raised his price target to $25 per share from $23 per share. He also predicted Cheniere would continue to post an operating loss through 2016.
Cheniere is working to renovate a natural gas liquefaction terminal near Cameron, La., so it will be able to export U.S. liquid natural gas. The company said Thursday that it authorized its contractor to start construction. The project was proposed about two years ago.
The company has received the necessary regulatory approvals and financing for the first phase of the project, Khan wrote in a research report. He also noted that Cheniere had revised its management compensation plan.
Cheniere’s story “continues to be de-risked,” he stated.
Khan expects a loss of 17 cents per share for the third quarter and the same for the fourth quarter. For 2012, he expects a loss of $1.11 per share.
Analysts surveyed by FactSet, on average, expect a third-quarter loss of 20 cents per share and a fourth-quarter loss of 23 cents per share. Analysts expect a loss of $1.14 per share for all of 2012.
Shares of Cheniere rose 29 cents, or 2.1 percent, to $14.35 in midday trading. Its shares are down 24 percent from a 52-week high of $18.92 per share set in late April. They traded as low as $3.17 in October.