New Fortress Energy (NFE) has quietly staged a sharp rebound, with the stock jumping about 12% in a day and nearly 29% over the past week, despite weak long term returns.
See our latest analysis for New Fortress Energy.
The latest bounce takes New Fortress Energy’s share price to $1.57, but that momentum sits against a steep backdrop, with the year-to-date share price return deep in negative territory and multi-year total shareholder returns still severely underwater. This suggests sentiment has shifted in the short term but not yet in the longer trend.
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With analysts seeing upside from here but fundamentals still burdened by heavy losses and years of value destruction, the key question is whether New Fortress Energy is now a contrarian bargain or if the market already anticipates any recovery.
With New Fortress Energy last closing at $1.57 versus a fair value estimate of $3.38, the most followed narrative points to a deep valuation gap built on ambitious recovery assumptions.
The FLNG asset coming online is expected to significantly contribute to future earnings as it allows optimization of the portfolio, leading to increased future returns, positively impacting revenue and earnings.
Curious how a loss-making energy infrastructure group gets priced for a sharp turnaround? The narrative leans on aggressive revenue expansion, margin repair and a surprisingly low future earnings multiple. Want to see how those moving parts combine into that fair value call?
Result: Fair Value of $3.38 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, significant execution risk in Brazil and Puerto Rico, along with exposure to volatile global gas prices, could quickly undermine the bullish turnaround narrative.
Find out about the key risks to this New Fortress Energy narrative.
While the consensus narrative leans heavily on turnaround potential and calls New Fortress Energy undervalued, our DCF model reaches a very different conclusion, suggesting the shares are actually overvalued at current levels. If both views use the same growth story, which one can you really lean on?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out New Fortress Energy for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 908 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.