New Fortress: Pivoting Away From Lakach FLNG

After speaking with New Fortress, we’ve made several updates to our model. Our fair value estimate is unchanged at $30 per share, as both positive and negative changes offset each other. Essentially, our near-term forecast is lowered while our expected returns have improved over the medium term. Our no-moat rating is also unchanged. While our fair value estimate is unchanged, we think the updates better position New Fortress over the long run to more efficiently utilize its terminals and ultimately obtain more lucrative power contracts with energy-insecure countries. We still estimate about two thirds of its terminal capacity is not utilized in 2026, so there’s plenty of room for further growth if New Fortress can acquire the needed liquefied natural gas, or LNG.