After the ceasefire, crude tanker traffic recovered to a quarter of pre-war levels. LNG carriers came back at under a tenth. That gap decides this winter.
Thank you for this very thorough analysis. Cheniere is one of my favorite stocks because it’s more of an infrastructure investment than say, a financial one. A productive real asset. It’s interesting that so many analysts 20+? … missed by such a wide margin. My biggest concern is the durability of their franchise. Any thoughts about that?
On the analyst point, Q2 beat itself was about 5% on EBITDA (good but not extraordinary), and the 16% revenue beat was much larger. The reason is that marketing and optimization revenue is virtually unmodelable from outside.
Regarding franchise durability, the contracted is very durable, with average remaining terms going into 2030s and 2040s. Pricing is HH based, so this part feels like a long term, durable, infrastructure asset. I don't think it'll erode.
Risk sits in new volume. Feygin mentioned this on the call too, he's confident about Corpus Phase 1 volumes, but said he's "less comfortable" about pricing power on incremental capacity. We'll just have to continuously watch if Corpus Phase 1 gets commercialized at a premium fee over the next year. If they have to concede on fees, incremental franchise value will be compressed (while the existing book stays intact).
Thank you for this very thorough analysis. Cheniere is one of my favorite stocks because it’s more of an infrastructure investment than say, a financial one. A productive real asset. It’s interesting that so many analysts 20+? … missed by such a wide margin. My biggest concern is the durability of their franchise. Any thoughts about that?
Thanks for reading.
On the analyst point, Q2 beat itself was about 5% on EBITDA (good but not extraordinary), and the 16% revenue beat was much larger. The reason is that marketing and optimization revenue is virtually unmodelable from outside.
Regarding franchise durability, the contracted is very durable, with average remaining terms going into 2030s and 2040s. Pricing is HH based, so this part feels like a long term, durable, infrastructure asset. I don't think it'll erode.
Risk sits in new volume. Feygin mentioned this on the call too, he's confident about Corpus Phase 1 volumes, but said he's "less comfortable" about pricing power on incremental capacity. We'll just have to continuously watch if Corpus Phase 1 gets commercialized at a premium fee over the next year. If they have to concede on fees, incremental franchise value will be compressed (while the existing book stays intact).