Analyst Jason Gabelman of TD Cowen maintained a Hold rating on NextDecade, reducing the price target to $7.00.
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Jason Gabelman has given his Hold rating due to a combination of factors influencing NextDecade’s financial outlook. The company recently sanctioned its Rio Grande LNG train 5, with the funding aligning with expectations, which mitigated concerns about the need for additional expensive capital. However, Gabelman maintains a conservative stance on the company’s spot margin assumptions, pricing in $3/mcf compared to the company’s $5/mcf, which affects the valuation.
Additionally, while the Phase 1 development is progressing ahead of schedule, the market remains cautious about future train sanctions without contractual support. The company’s liquidity is expected to be sufficient until 2027, but the cost of equity remains a concern, given the current debt situation. These factors, along with adjustments in valuation based on distributable cash flow, have led to a reduced price target of $7 and the decision to maintain a Hold rating.
Based on the recent corporate insider activity of 51 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of NEXT in relation to earlier this year.