Is Cheniere Energy Inc (LNG) overvalued?
On Equity Rank's model estimate, LNG trades close to its fair value (3% below it). Cheniere Energy Inc (LNG) last closed at $277.95; the multi-method model fair value is $285.95.
| Price | Model fair value | Price vs model |
|---|---|---|
| $277.95 | $285.95 | 3% below |
What the answer rests on
- 4 of 10 valuation methods put LNG's value above its price and 6 put it below, so the methods disagree.
- To justify today's price, LNG's free cash flow would need to grow about -3.1% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -34.3% a year.
- LNG trades at 20.8 times its last year's earnings, against a median of 14.8 for 110 profitable Energy companies.
- Over the past year the price sat below the model fair value on 93% of trading days. The gap ranged from 17% below to 2% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind LNG's fair value · What prices assume · Other companies