Excelerate Energy Lags Peers Amid Risks Of Operating In Developing Countries: Analyst Downgrades

JP Morgan analyst Jeremy Tonet downgraded Excelerate Energy, Inc EE to Underweight from Neutral, raising the price target from $22 to $31.

The analyst notes that while Excelerate Energy has experienced steady growth within the midstream sector, its EBITDA is expected to remain flat from 2023 to 2025, despite growth opportunities mentioned at the IPO.

They acknowledge that the expected FSRU delivery in 2026 will boost EBITDA, but the anticipated growth from the IPO has been slow to materialize, leaving Excelerate Energy’s track record lagging behind other companies in the coverage.

Despite Excelerate Energy’s significant outperformance in 2024, with a 97% total shareholder return compared to the AMNA index’s 44%, the analyst views EE as offering a lower risk/reward proposition due to emerging market counterparty risks.

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Considering expected total returns in 2025, the analyst downgrades EE from Neutral to Underweight.

Tonet acknowledges Excelerate Energy’s goals for global LNG access but also highlights the risks of operating in developing countries.

The analyst also points out that each country presents its own challenges regarding contract law, legal precedent, and enforceability.

With Bangladesh undergoing reforms and a caretaker government in place after the resignation of the former Prime Minister, the analyst stresses the higher risks of investing in a global company compared to a U.S.-focused midstream company.

Price Action: EE shares are trading lower by 6.78% to $29.55 at last check Tuesday.

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