The analyst of JP Morgan Jeremy Tonet downgraded Excelerate Energy, Inc (NYSE:EE) from Neutral to Underweight, increasing the price target from $22 to $31.
The analyst notes that Excelerate Energy has seen steady growth in the Midstream sector, but its EBITDA is expected to remain flat from 2023 to 2025, despite the growth opportunities mentioned during its IPO.
He acknowledges that FSRU’s planned delivery in 2026 will boost EBITDA, but that the growth predicted at IPO has been slow to materialize, putting Excelerate Energy’s balance sheet behind other companies.
Despite Excelerate Energy’s significant performance in 2024, with a total shareholder return of 97% compared to 44% for the AMNA index, the analyst believes that EE’s risk/return proposition is lower due to counterparty risks in emerging markets.
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With the stock forecast for total returns in 2025, the analyst downgrades Excelerate Energy’s stock from Neutral to Underweight.
Tonet recognizes Excelerate Energy’s goals for global LNG access, but also highlights the risks of operating in developing countries.
-The analyst also points out that each country presents its own challenges when it comes to contract law, jurisprudence and enforcement.
With Bangladesh undergoing reform and having a transitional government following the resignation of the former prime minister, the analyst highlights the higher risks of investing in a global company compared to a the mid-chain industry focused on the United States.
Price movement: At last check on Tuesday, EE stock was down 6.78% to $29.55.
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