New Fortress Energy (NFE) is drawing investor focus after news emerged that it is considering a UK scheme of arrangement to restructure debt. The move aims to sidestep U.S. bankruptcy proceedings amid ongoing financial pressures.
See our latest analysis for New Fortress Energy.
The scheme-of-arrangement news comes after a tough year for New Fortress Energy investors, with the share price sliding 92% year to date and major swings after each debt update. Over the longer term, the company’s total shareholder returns have also been deeply negative, signaling fading momentum as debt risk weighs on sentiment.
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With the stock trading at less than half of analyst price targets and shares deeply discounted from recent highs, investors are left to wonder if New Fortress Energy is an undervalued turnaround story or if expectations for future growth are already reflected in the price.
New Fortress Energy’s latest fair value narrative signals a striking gap between its calculated outlook and the last close of $1.29 per share. This suggests a deep disconnect between analyst models and the current market mood.
The FLNG asset coming online is expected to significantly contribute to future earnings as it allows optimization of the portfolio. This is anticipated to lead to increased future returns, positively impacting revenue and earnings. The initiative to reduce debt and simplify the capital structure is expected to decrease debt costs, improving net margins and overall financial health.
Curious how this low share price is just the starting point? The narrative is built on bold projections for revenue growth, margin leaps, and a turnaround in profitability. Ever wondered what happens if those numbers are hit? There is a pivotal financial shift in the story that could flip the script for every shareholder. Only in the full narrative.
Result: Fair Value of $3.38 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, ongoing expansion into new markets and heavy reliance on just a few regions mean that any geopolitical or regulatory changes could quickly derail projections.
Find out about the key risks to this New Fortress Energy narrative.
Switching gears to the SWS DCF model, the picture looks much less optimistic. According to this approach, New Fortress Energy appears overvalued, with its current share price higher than what the DCF suggests is fair value. This raises the question: are the market’s rebound hopes running too far ahead?
