Venture Global (VG.US) LNG is in legal disputes and facing customer attrition, will shouting "increase holdings" still be of no help?
Since its market debut, Venture Global, despite being a major supplier of liquefied natural gas (LNG), has not been able to surpass its $25 IPO price and has instead dropped by over 30%.
On Tuesday, the stock price of the large natural gas exporter Global (VG.US) reached its peak for the week. Despite a lackluster performance on its debut on the New York Stock Exchange on January 24, opening at $24.05 per share and reaching a market value of $58.2 billion, several brokerage firms recently initiated coverage on the company and gave positive outlooks.
Latest data shows that Venture Global's stock price rose by 6.08% on Tuesday, reaching $16.93 per share. Since its market debut, the company, a major supplier of liquefied natural gas (LNG), has failed to surpass its $25 IPO price, instead dropping by over 30%. This decline is mainly attributed to investor and analyst concerns about its long-term profit prospects, as well as ongoing legal disputes with BP p.l.c. Sponsored ADR (BP.US) and Shell (SHEL.US).
With the end of the brokerage enforced quiet period, firms such as J.P. Morgan, Citigroup, Royal Bank of Canada, Guggenheim, and Bank of Nova Scotia have started reporting on the stock. J.P. Morgan's analysts hold a "hold" view on Venture Global, believing that the company's "design one, build many" strategy is disruptive, enabling rapid and cost-effective market entry, while competitors face challenges such as project delays and rising costs.
Guggenheim initially gave Venture Global a "buy" rating, pointing out that benefited from the U.S. government's policy shifts supporting the energy sector and the growing demand for natural gas in Europe and Asia Pacific, Venture Global is expected to become the world's largest producer of liquefied natural gas. However, Citigroup maintained a "neutral" rating, issuing a warning that the increase in global liquefied natural gas supply could weaken the company's competitive advantage and pressure its profit margins.
Furthermore, Venture Global recently faced a setback from French company TotalEnergies (TTE.US), which rejected a proposal to become a long-term customer for its U.S. liquefied natural gas terminal. These events undoubtedly add uncertainty to Venture Global's future development and may lead to potential fluctuations in its stock price in the future.
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