Cheniere Energy Partners, L.P. CQP has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Factors Driving the Stock
Favorable Style Score
Cheniere Partners has an impressive Value Score of B. Value Score helps find stocks that are undervalued. Back-tested results have shown that stocks with a favorable Value Score, combined with a solid Zacks Rank, are the best investment bets.
Robust Outlook
The Zacks Consensus Estimate for CQP’s 2024 earnings is pegged at $4.15 per share, suggesting growth of 57% from the year-ago reported figure. The consensus mark for 2025 earnings is pegged at $4.18 per share, also indicating a year-over-year improvement.
Impressive Earnings Surprise History
Cheniere Partners’ bottom line outpaced estimates in the trailing four quarters, the average surprise being 28.8%.
Key Business Tailwinds
CQP holds a strong position in the market as a leading LNG exporter in the United States, thanks to its Sabine Pass LNG terminal, which boasts a production capacity of 30 Mtpa. The terminal’s strategic location and connectivity to major pipelines further enhance its competitive edge, enabling the company to capitalize on the growing global demand for LNG.
As of Mar 31, 2024, Cheniere Partners maintained a robust liquidity position, with $2.1 billion in total available liquidity. This includes $333 million in cash and cash equivalents, $59 million in restricted cash, and substantial available commitments under credit facilities. This strong liquidity allows the partnership to manage operations efficiently and invest in growth opportunities without financial constraints.
Cheniere Partners has a solid track of providing consistent cash distributions to its unitholders. For the first quarter of 2024, the partnership declared a cash distribution of 81 cents per common unit, reaffirming its 2024 distribution guidance of $3.15-$3.35 per common unit. This stable and predictable income stream is attractive to income-focused investors seeking reliable returns.
The partnership is actively pursuing strategic expansion projects to increase its production capacity. The SPL Expansion Project aims to add approximately 20 million tons per annum of LNG production capacity, showcasing Cheniere Partners’ commitment to growth. This expansion is supported by applications submitted to the Federal Energy Regulatory Commission and the Department of Energy for the necessary authorizations.
Cheniere Partners continues to demonstrate strong operational performance, as evidenced by the export of 114 LNG cargoes totaling 418 TBtu in the first quarter of 2024. This represents a 2% increase in cargo and a 4% increase in volume from the same period in 2023. The consistent rise in LNG exports highlights the partnership’s operational efficiency and ability to meet global LNG demand.
Risks
The Zacks Rank #3 (Hold) partnership has been offering lower dividends to its investors, which may not be attractive to those seeking consistent income from their investments.
Key Picks
Investors interested in the energy sector may look at some better-ranked companies mentioned below. These three companies presently sport a Zacks Rank #1 (Strong Buy).
SM Energy Company is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The company’s attractive oil and gas investments should create long-term shareholder value.
The Zacks Consensus Estimate for SM’s 2024 and 2025 earnings per unit is pegged at $7.09 and $8.66, respectively. The company has a Zacks Style Score of A for Value. It has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 30 days.
Sunoco LP is a leading wholesale motor fuel distributor in the United States, boasting a vast distribution network spanning 40 states. With long-term contracts servicing more than 10,000 convenience stores, it distributes more than 10 fuel brands, ensuring a stable revenue stream. SUN currently has a Value and Growth Score of A.
The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $7.29 and $7.26, respectively. The partnership has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
GeoPark Ltd., based in Hamilton, Bermuda, is an explorer, operator and consolidator in the oil and gas sector. The company primarily operates in Chile, Colombia, Brazil and Argentina. It has a Zacks Style Score of A for Value and B for Growth.
The Zacks Consensus Estimate for 2024 and 2025 earnings per unit is pegged at $3.23 and $3.98, respectively. The company has witnessed upward earnings estimate revisions for 2024 and 2025 in the past 60 days.
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