Shares of shipper Golar LNG Ltd. fell in trading Wednesday, after two analysts downgraded the stock, saying shares don't have enough room to grow over the next year to warrant a top rating.
Jefferies analyst Douglas J. Mavrinac cut the stock to "Hold" from "Buy," and maintained his $25 price target. Friedman, Billings, Ramsey analyst Rehan Rashid lowered his rating "Outperform" to "Market Perform," and kept a $21 price target.
Mavrinac said he expects slowing demand for liquefied natural gas to affect the Bermuda-based company's 2008 earnings. Specifically, continued delays in new projects to transform the gas into liquid form for transport, combined with the company's growing fleet, will likely hurt profit this year, he said.
He cut his 2008 earnings estimates to adjust for these factors, but raised his 2009 estimates citing an expected benefit from some contracted vessels.
Rashid said he expects an excess supply of gas-carrying vessels to weigh down daily rates for the company's ships. Also, the analyst noted that international growth should moderate this year, providing another hurdle.
However, Rashid said he expects that additional natural gas capacity coming online in the fourth quarter should provide a boost in 2009.
Shares fell $1.48, or 6.9 percent, to $20.11. The stock has traded between $12.41 and $27.70 in the past year.
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