Tuesday, Stifel, a financial services firm, increased its price target on shares of Merus N.V. (NASDAQ:) to $90 from the previous $65, while maintaining a Buy rating on the stock. This adjustment comes as GLNG shares experienced a slight decline in the range of 2-3% this morning following their first-quarter earnings report.
The reported adjusted EBITDA of approximately $64 million was around 5% lower than the consensus estimate of about $67 million. The decrease was attributed to weaker commodity prices affecting the margins of Hilli, one of the company’s assets.
Despite the lower than anticipated earnings, GLNG’s stock has seen a rise of roughly 30% over the past three months. This uptick is attributed to signs of an improving market for contracting its assets, including the Hilli, whose contract is due to expire in July 2026, and a pre-FID Mark II (Fuji conversion).
The company has made strides in detailed contract negotiations for a Floating Liquefied Natural Gas (OTC:) (FLNG (OL:)) project starting in 2027, which could last for up to 20 years and be awarded to either Hilli or Mark II.
The company has also indicated that future customer contracts are expected to be for four trains, a notable increase from the approximately 2.3 trains currently utilized by Hilli. This change suggests a potential significant boost in asset-level EBITDA.
Furthermore, depending on the next assignment for Hilli, it could potentially commence its subsequent contract as early as the second half of 2026. Even with a scheduled shipyard stay, it is projected to be ready by 2027.
In conclusion, as GLNG progresses in its negotiations with potential customers for contracting the Hilli and the Mark II for 2027, the outlook remains positive. The company anticipates deploying these units in West Africa, although there are growing opportunities in the Americas as well.
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