Cheniere Energy (NYSE:LNG) Shares Gap Down on Disappointing Earnings

Key Points

• Huge earnings miss: Cheniere reported EPS of ($16.65) versus analysts' $4.25 estimate, though revenue slightly beat at $5.87B; the stock gapped down (from $261.42 to $240.16) and traded down about 6% on heavy volume.
• Capital returns announced: The board authorized a $10.0 billion share buyback (up to ~21.1% of shares) and declared a quarterly dividend of $0.555 ($2.22 annual, ~0.9% yield; ex-dividend May 11).
• Market sentiment is a "Moderate Buy" with an average target of $295.56, but insiders (including the CFO and an EVP) recently sold material positions while institutional ownership stands at roughly 87% with several large new or increased stakes.

Shares of Cheniere Energy, Inc. (NYSE:LNG - Get Free Report) gapped down before the market opened on Thursday following a weaker than expected earnings announcement. The stock had previously closed at $261.42, but opened at $240.16. Cheniere Energy shares last traded at $245.4870, with a volume of 782,886 shares trading hands.

The energy company reported ($16.65) EPS for the quarter, missing analysts' consensus estimates of $4.25 by ($20.90). The company had revenue of $5.87 billion during the quarter, compared to the consensus estimate of $5.69 billion. Cheniere Energy had a return on equity of 32.04% and a net margin of 26.68%.Cheniere Energy's revenue was up 7.8% on a year-over-year basis. During the same quarter in the prior year, the company earned $1.57 earnings per share.

Cheniere Energy Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Tuesday, May 19th. Shareholders of record on Monday, May 11th will be paid a $0.555 dividend. This represents a $2.22 dividend on an annualized basis and a yield of 0.9%. The ex-dividend date is Monday, May 11th. Cheniere Energy's dividend payout ratio is currently 9.14%.

Cheniere Energy announced that its Board of Directors has authorized a stock repurchase program on Thursday, February 26th that allows the company to repurchase $10.00 billion in shares. This repurchase authorization allows the energy company to buy up to 21.1% of its shares through open market purchases. Shares repurchase programs are often a sign that the company's board believes its shares are undervalued.

Analyst Upgrades and Downgrades

A number of equities research analysts recently commented on LNG shares. Morgan Stanley decreased their target price on shares of Cheniere Energy from $313.00 to $308.00 and set an "overweight" rating for the company in a research report on Tuesday, April 21st. The Goldman Sachs Group increased their target price on shares of Cheniere Energy from $276.00 to $312.00 and gave the company a "buy" rating in a research report on Tuesday, March 24th. Bank of America increased their target price on shares of Cheniere Energy from $296.00 to $322.00 and gave the company a "buy" rating in a research report on Friday, March 20th. Wolfe Research set a $220.00 target price on shares of Cheniere Energy and gave the company an "outperform" rating in a research report on Wednesday, January 14th. Finally, Citigroup increased their target price on shares of Cheniere Energy from $280.00 to $330.00 and gave the company a "buy" rating in a research report on Thursday, April 2nd. One research analyst has rated the stock with a Strong Buy rating, sixteen have issued a Buy rating and two have given a Hold rating to the company's stock. According to MarketBeat.com, the stock currently has an average rating of "Moderate Buy" and an average target price of $295.56.

Insider Buying and Selling

In other news, CFO Zach Davis sold 29,000 shares of the stock in a transaction on Monday, March 30th. The shares were sold at an average price of $300.00, for a total value of $8,700,000.00. Following the sale, the chief financial officer owned 87,146 shares in the company, valued at $26,143,800. This represents a 24.97% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, EVP Sean N. Markowitz sold 22,246 shares of the stock in a transaction on Thursday, March 26th. The stock was sold at an average price of $290.98, for a total transaction of $6,473,141.08. Following the completion of the sale, the executive vice president owned 64,000 shares in the company, valued at $18,622,720. The trade was a 25.79% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Corporate insiders own 0.55% of the company's stock.

Institutional Trading of Cheniere Energy

Hedge funds and other institutional investors have recently made changes to their positions in the business. Norges Bank acquired a new stake in Cheniere Energy during the fourth quarter valued at $731,774,000. Bank of New York Mellon Corp grew its position in Cheniere Energy by 174.3% during the first quarter. Bank of New York Mellon Corp now owns 2,244,268 shares of the energy company's stock valued at $636,834,000 after buying an additional 1,426,058 shares during the period. Marshall Wace LLP grew its position in Cheniere Energy by 555.0% during the fourth quarter. Marshall Wace LLP now owns 810,138 shares of the energy company's stock valued at $157,483,000 after buying an additional 686,459 shares during the period. AustralianSuper Pty Ltd acquired a new stake in Cheniere Energy during the third quarter valued at $142,688,000. Finally, Arrowstreet Capital Limited Partnership grew its position in Cheniere Energy by 518.8% during the fourth quarter. Arrowstreet Capital Limited Partnership now owns 577,533 shares of the energy company's stock valued at $112,267,000 after buying an additional 484,198 shares during the period. Institutional investors and hedge funds own 87.26% of the company's stock.

Cheniere Energy Trading Down 6.0%

The company has a market cap of $51.65 billion, a price-to-earnings ratio of 10.13 and a beta of 0.07. The company has a quick ratio of 0.81, a current ratio of 0.94 and a debt-to-equity ratio of 1.74. The company's 50-day moving average is $263.22 and its 200 day moving average is $226.53.

Cheniere Energy Company Profile

Cheniere Energy, Inc is a U.S.-based energy company that develops, owns and operates liquefied natural gas (LNG) infrastructure and markets LNG to global customers. The company's core activities include natural gas liquefaction, long‑term and short‑term LNG sales and marketing, and the associated midstream services required to move gas from production basins to international markets. Cheniere focuses on converting domestic natural gas into LNG for export, providing a bridge between North American supply and overseas demand.

Cheniere's principal operating assets are large-scale LNG export terminals located on the U.S.

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