Is LNG a good stock to buy? We came across a bullish thesis on Cheniere Energy, Inc. on Imran Almaleh’s Substack. In this article, we will summarize the bulls’ thesis on LNG. Cheniere Energy, Inc.’s share was trading at $261.42 as of May 6th. LNG’s trailing and forward P/E were 11.17 and 18.38 respectively according to Yahoo Finance.
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Cheniere Energy, Inc., an energy infrastructure company, primarily engages in the liquefied natural gas (LNG) related businesses in the United States. (LNG) is the cleanest equity expression of the post-Hormuz LNG supply deficit, yet the market misprices it as a commodity-linked gas exporter rather than a contracted tolling infrastructure asset, creating a valuation disconnect.
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Approximately 95% of volumes are contracted under long-term liquefaction agreements with a weighted average life of around 15 years, generating fixed tolling fees of roughly $2.50 to $3.50 per MMBtu alongside Henry Hub passthrough exposure that neutralizes feedgas volatility.
Post-Hormuz LNG market reflects structural supply shock of roughly 49 million tonnes per annum, equivalent to more than 10% global trade, driven by Qatar North Field disruptions and multi-year delays in US LNG projects including NFE expansions. Demand side, incremental requirements from Europe’s Russian gas replacement, Asia’s energy security buildout, and FSRU deployment in India, Vietnam, Bangladesh, and Pakistan add over 60 million tonnes of LNG demand by 2030.
Financial performance underscores model, with annual EBITDA of approximately $6.9 billion and distributable cash flow above $5 billion, supported by highly visible contracted revenue streams. Forward guidance implies expansion to $6.75–7.25 billion EBITDA and up to $4.85 billion DCF, translating into an 8–11% cash yield over 11% at steady state capacity.
Scenarios suggest base case materially above current levels and bull case approaching upside if LNG tightness persists through 2028, downside remain anchored by contracted cash flows and infrastructure-like stability. Cheniere Energy presents a mispriced infrastructure asset with asymmetric upside driven by supply deficits, contracted earnings visibility, and optional exposure to sustained global LNG price strength.
Previously, we covered a bullish thesis on Kinder Morgan, Inc. (KMI) by Gregg Jahnke in October 2024, which highlighted rising project backlog driven by industrial demand, AI-linked infrastructure growth, and regulatory tailwinds. KMI’s stock price has appreciated by approximately 27.28% since our coverage. Imran Almaleh shares a similar view but emphasizes Cheniere Energy, Inc. as a contracted LNG tolling infrastructure asset benefiting from a post-Hormuz supply deficit and structural demand imbalance.
Cheniere Energy, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 81 hedge fund portfolios held LNG at the end of the fourth quarter which was 76 in the previous quarter. While we acknowledge the risk and potential of LNG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LNG and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
