What happened
Liquefied natural gas (LNG) company NextDecade's (NEXT 2.24%) stock was the next big thing for many investors on Tuesday. They sent its price up by nearly 7% following a rather bullish new analyst take on the energy specialist. That was more than good enough to beat the performance of the S&P 500 index, which slipped by 1.2% on the day.
So what
Well before market open, Benjamin Nolan at Stifel upgraded his recommendation on NextDecade stock. He now views the LNG company's shares as a buy, where formerly he had a neutral stance. He also raised his price target to $9 per share from the preceding $7.50.
Nolan is particularly encouraged by a recent move by NextDecade. Last month, the company announced that it made a final investment decision (FID) to build three liquefaction trains at its Rio Grande export facility located in Texas. This is the first phase of an expansion of its business.
In a new research note the prognosticator wrote that the period following this, plus a recent and notable sell-off in NextDecade stock, has left the company's risk-reward balance "positively skewed." He feels that if and when the company adds fourth and fifth trains to the project, it would add $16 per share in value to the stock.
Now what
NextDecade is well placed to capitalize on the world's hunger for natural gas. The Ukraine war in particular has ramped up demand for alternatives to traditional natural gas pipelines, and in general many energy consumers are looking for relatively inexpensive sources -- LNG fits the bill very nicely.
