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Why New Fortress Energy Stock Is Soaring Today

By Matthew DiLallo – Oct 7, 2021 at 12:58PM

Key Points

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The clean energy infrastructure company gave investors some great news.

What happened

Shares of New Fortress Energy (NFE -2.62%) rocketed nearly 25% by 11:30 a.m. EDT on Thursday. Fueling the liquefied natural gas (LNG) stock was an upbeat outlook.  

So what

New Fortress Energy held an investor update call today to discuss its natural gas supply and earnings goals. It also filed a Form 8-K with the SEC detailing what it planned to address on that call.  

An LNG tanker at sunset.

Image source: Getty Images.

The company noted in the filing that there had been unprecedented volatility in the global gas and LNG markets. However, New Fortress also pointed out that it designed its business to protect itself from price swings while maintaining significant flexibility to take advantage of opportunities. Because of that, it increased its supply, the bulk of which it has sold. 

Those factors led New Fortress to meaningfully raise its outlook for the fourth quarter and increase its 2022 goal. For the fourth quarter, it's now targeting an operating margin of $374 million, double its previous target. Meanwhile, it boosted its 2022 operating margin goal from $1 billion to $1.11 billion. 

Finally, the company said it's working to lock in the gas source for its first Fast LNG asset and expects to do so before it finishes construction next year. Negotiations with gas sellers are going so well that it's likely the company will "consider developing multiple additional projects." This project would materially improve its LNG supply portfolio. 

Now what

New Fortress Energy is benefiting from the strong natural gas market. It was able to take advantage of opportunities to lock up and sell more gas supplies in the near term and is working on locking up even more supplies. That positions it to earn more money, which could give its stock the fuel to keep rallying.

Matthew DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

New Fortress Energy LLC Stock Quote
New Fortress Energy LLC
$45.42 (-2.62%) $-1.22

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