BMO Downgrades Cheniere Energy Partners, Says Stock Reflects Natural Gas Development

Shares of Cheniere Energy Partners LP (NYSE: CQP) are already “priced to perfection,” and there are no visible catalysts to justify the stock trading at a premium to peers, according to BMO Capital Markets.

The Analyst

BMO Capital Markets’ Danilo Juvane downgraded Cheniere Energy Partners LP from Outperform to Market Perform with an unchanged $43 price target. 

The Thesis

Through its subsidiary Sabine Pass Liquefaction, Cheniere Energy Partners has plans to develop, construct and manage natural gas liquefaction facilities. The subsidiary has six trains at different stages of development.

While the execution of five trains has been solid, the company’s shares already reflect this, Juvane said in the Monday downgrade note.

The stock also reflects progress at Train 6, although this is pending a final investment decision, the analyst said, adding that the FID milestones is likely to be achieved.

Growth of the Cheniere platform is now levered to Corpus Christi, Juvane said. The only remaining catalyst is an “MLP simplification/roll-up,” which seems unlikely “given the potential for significant CQP unitholder dilution,” the analyst said. 

BMO recommends holding positions in Cheniere Energy, Inc. (NYSE: LNG) instead.

Price Action

Cheniere Energy Partners shares were down 1.09 percent at $42.46 at the time of publication Monday. 

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