CS on CQP/LNG
We believe the strong 4Q19 results and reiteration of 2020 guidance should support the stock today (oops!.) On the call besides qualitative color on 2020 guidance (again, likely to the low-end), we look for mgmt. to provide more detail on the potential impact of canceled cargoes – particularly after the news of Naturgy cancellations last week. As we have written recently, we do not see major impacts to cash flows from canceled cargoes – LNG still collects its SPA fee on each cargo, and can resell any already-purchased gas back into the liquid HH market. We believe a small impact could come from forgone margin opportunities around sourcing / shipping optimization, but this should be minor.
CQP, UNDERPERFORM, TP $38
LNG, OUTPERFORM, TP $79