On Thursday, CapitalOne made an adjustment to its outlook on New Fortress Energy (NASDAQ:NFE), reducing the stock's price target from $34.00 to $32.00, while the Equal-weight rating remains unchanged. The revision stems from updated projections based on the company's recent disclosures and refined assumptions concerning the timing and financials of their projects.
The analyst from CapitalOne noted that the second quarter is expected to see a significant drop in EBITDA, as it will be the first full quarter without the Federal Emergency Management Agency (FEMA) contract. However, a substantial increase is anticipated in the second half of the year with the contribution from Barcarena and increased volumes in Puerto Rico. The revised EBITDA estimates for 2024 and 2025 are now at $1.11 billion and $1.45 billion, respectively, both falling below the consensus.
It was also mentioned that these estimates do not include any potential FEMA settlement, which could be substantial. While the analyst expressed general caution regarding second-half ramps, they acknowledged the potential for New Fortress Energy's performance to improve later in the year. Despite this, the revised estimates remain conservative, especially when compared to the company's guidance, which does not factor in significant nonrecurring items like the possible FEMA settlement.
The update to the price target reflects the more conservative stance taken by CapitalOne, adjusting for the anticipated changes in the company's financial performance without the FEMA contract and considering the upcoming contributions from new projects.
InvestingPro Insights
In light of CapitalOne's revised outlook for New Fortress Energy (NASDAQ:NFE), it's important for investors to consider additional key metrics and insights. According to InvestingPro data, New Fortress Energy has a market capitalization of $5.41 billion and a P/E ratio that stands at 11.95. The company's revenue growth over the last twelve months as of Q1 2024 was 3.37%, with a notable quarterly revenue growth of 19.2% in Q1 2024, indicating potential for financial improvement despite current challenges.
InvestingPro Tips highlight that New Fortress Energy operates with a significant debt burden and is quickly burning through cash, which may concern some investors. However, analysts predict the company will be profitable this year, and it has been profitable over the last twelve months. These factors, combined with a strong return over the last five years, provide a nuanced perspective for those evaluating the company’s stock.
For a deeper analysis, investors can explore additional InvestingPro Tips for New Fortress Energy, which include 9 more insights that could further inform investment decisions. To benefit from these insights and more, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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