New Fortress Earnings: More Project Delays Heighten Debt Reduction Need

No-moat New Fortress Energy reported fourth-quarter results and provided updates on its major projects, resulting in no change to our fair value estimate of $39. Our view is that New Fortress is showing some fundamental profitability but with warning signs flashing. Management chose to focus on some milestones, namely the receiving terminals in Puerto Rico and Brazil. While these are important and represent excellent growth opportunities, we view the lack of supply growth to feed these terminals as far more important, given that the company already has more capacity than it can fill.