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FLEX LNG Ltd (FLNG)
NYSE:FLNG
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FLEX LNG
(NYSE:FLNG)
65Neutral
Positive Factors
Dividend Strength
FLNG's high contract coverage provides strong cash flow visibility which should continue to fund the dividend.
Earnings Performance
Flex LNG reported an overall 2Q beat, as the termination of the back end of an interest rate swap pushed earnings above expectations.
Financial Stability
Flex declared its usual dividend of $0.75/sh and announced it had received credit approval for the refinancing of 3 ships for $430 million, unlocking $97 million in cash.
Negative Factors
Market Conditions
EU gas inventories are currently sitting at all-time highs for this point in the year at ~95% full, creating an additional overhang for LNG carrier rates.
Spot Rate Pressure
Limited spot cargoes across both Atlantic and Pacific basins is putting downward pressure on spot rates.
FLEX LNG (FLNG) vs. S&P 500 (SPY)
Market Cap
$1.16B
Dividend Yield13.8%
Average Volume (3M)591.44K
Price to Earnings (P/E)10.0
Beta (1Y)0.21
Revenue Growth-3.95%
EPS Growth-2.25%
CountryUS
Employees8
SectorEnergy
Sector Strength72
IndustryFossil Fuels
Share Statistics
EPS (TTM)2.18
Shares Outstanding54,087,770
10 Day Avg. Volume739,572
30 Day Avg. Volume591,444
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)6.52
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$25.00Price Target Upside15.05% Upside
Rating ConsensusHold
Number of Analyst Covering2
FLEX LNG Business Overview & Revenue Model
Company DescriptionFLEX LNG Ltd. engages in the operation of carrier vessels. It focuses on the engineering and construction of liquefied natural gas producer units. The company was founded by Philip Eystein Fjeld, Trym Tveitnes and Jostein Ueland in August 2006 and is headquartered in Road Town, British Virgin Islands.
How the Company Makes MoneyFLEX LNG makes money primarily through long-term time charter agreements with energy companies and traders who require transportation of LNG. These contracts provide a steady stream of revenue, as customers pay a fixed daily rate to use FLEX LNG's vessels over an agreed period. The company also engages in spot market charters, which offer higher rates when demand for LNG shipping capacity spikes. Additionally, the company's earnings are influenced by partnerships with major energy producers and traders who depend on FLEX LNG's modern fleet for efficient and reliable LNG transport.
FLEX LNG Financial Statement Overview
Summary
FLEX LNG demonstrates robust financial health with strong profitability and a stable balance sheet. While cash flow management poses some challenges, the company maintains solid financial metrics that support its operations and growth in the fossil fuels industry.Income Statement
FLEX LNG shows strong profitability with a stable gross profit margin and EBIT margin over the years. However, the net income has been fluctuating, indicating potential volatility. Revenue growth is inconsistent but has shown resilience in challenging years.75
Positive
Balance Sheet
The balance sheet reflects a moderate debt-to-equity ratio and a solid equity ratio, indicating a stable capital structure. The return on equity is strong, but there is potential risk due to substantial total debt levels.70
Positive
Cash Flow
Operating cash flow is consistently positive, showing good cash conversion from operations. However, free cash flow has seen significant fluctuations, which may indicate challenges in managing capital expenditures and financing needs.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 356.35M | 371.02M | 347.92M | 343.45M | 164.46M | Gross Profit |
| 207.58M | 227.62M | 209.76M | 209.04M | 81.92M | EBIT |
| 197.79M | 217.16M | 200.62M | 201.16M | 75.62M | EBITDA |
| 298.89M | 302.20M | 336.96M | 270.99M | 117.47M | Net Income Common Stockholders |
| 117.68M | 120.04M | 188.04M | 162.21M | 8.11M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 437.15M | 410.43M | 332.33M | 200.65M | 128.88M | Total Assets |
| 2.67B | 2.71B | 2.68B | 2.57B | 2.30B | Total Debt |
| 1.81B | 1.81B | 1.71B | 1.63B | 1.40B | Net Debt |
| 1.37B | 1.40B | 1.38B | 1.43B | 1.27B | Total Liabilities |
| 1.86B | 1.86B | 1.77B | 1.68B | 1.47B | Stockholders Equity |
| 806.63M | 847.65M | 907.09M | 889.39M | 835.17M |
| Cash Flow | Free Cash Flow | |||
| 182.79M | 175.03M | 219.88M | -51.09M | -602.09M | Operating Cash Flow |
| 182.80M | 175.03M | 219.88M | 214.84M | 89.30M | Investing Cash Flow |
| -4.00K | -2.00K | -5.00K | -265.93M | -691.39M | Financing Cash Flow |
| -155.61M | -96.54M | -88.76M | 123.10M | 603.32M |
FLEX LNG Technical Analysis
Negative
21.73
Price Trends
23.63
Negative
23.17
Negative
23.88
Negative
Market Momentum
-0.58
Positive
40.92
Neutral
58.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FLNG, the sentiment is Negative. The current price of 21.73 is below the 20-day moving average (MA) of 22.49, below the 50-day MA of 23.63, and below the 200-day MA of 23.88, indicating a bearish trend. The MACD of -0.58 indicates Positive momentum. The RSI at 40.92 is Neutral, neither overbought nor oversold. The STOCH value of 58.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FLNG.
FLEX LNG Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $47.28B | 15.10 | 60.45% | 0.88% | -22.22% | -64.97% | |
76 Outperform | $141.61M | 2.75 | 11.06% | 2.54% | -4.35% | 29.57% | |
74 Outperform | $1.14B | 8.44 | 12.05% | 12.56% | 19.49% | 39.16% | |
65 Neutral | $1.16B | 10.02 | 14.23% | 13.80% | -3.95% | -2.25% | |
57 Neutral | $3.35B | 67.29 | 2.44% | 2.94% | -1.35% | -75.72% | |
57 Neutral | $8.36B | 5.47 | -5.51% | 7.41% | 0.15% | -68.69% |
* Energy Sector Average
Performance Comparison
FLNG
FLEX LNG
21.97
-0.81
-3.56%
LNG
Cheniere Energy
211.55
55.13
35.24%
GLNG
Golar LNG
32.69
9.79
42.75%
SFL
SFL Corporation
8.11
-3.70
-31.33%
DLNG
Dynagas LNG Partners
3.81
1.12
41.64%
FLEX LNG Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -12.87% | Next Earnings Date: May 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with strong financial performance, stable revenues, and successful long-term charter extensions. However, challenges such as declining freight rates, geopolitical uncertainties, and regulatory pressures present significant hurdles. The company's strategic backlog and financial stability position it to weather near-term challenges, while long-term prospects depend on market recovery and regulatory adaptation.Highlights
Stable Revenue and Earnings
Revenues for Q4 2024 came in at $89.5 million, in line with guidance, with net income driven by derivative income of $20.1 million, resulting in adjusted net income of $30.8 million. Earnings per share were $0.84 or $0.57 on an adjusted basis.
Long-Term Charter Extensions
Flex LNG secured extensions for ships Flex Resolute and Flex Courageous until 2032, with options to 2039, and a new 15-year charter for Flex Constellation starting in Q1 or Q2 2026, extending to 2041.
Strong Cash Position and Dividends
Flex LNG holds a cash balance of $437 million and declared a dividend of $0.75 per share, resulting in a total dividend of $3 for 2024, implying a running yield of about 12%.
Operational Efficiency
Achieved 99.7% technical uptime and zero lost time injuries in 2024, indicating strong operational performance and safety standards.
Lowlights
Slump in Freight Rates
Freight rates significantly decreased to around $10,000 per day, which is uneconomical for older tonnage, due to changes in trading patterns and increased ship availability.
Challenges in European and Asian Markets
European imports decreased in 2024, and there are uncertainties in Asian markets due to geopolitical tensions and potential tariffs on U.S. LNG from China.
Environmental and Regulatory Challenges
The introduction of EU ETS and FuelEU Maritime regulations impose additional costs and complexities on operations, particularly affecting older ships.
Company Guidance
In the fourth quarter of 2024, Flex LNG reported revenues of $90.9 million, slightly exceeding their guidance of $89.5 million, with a significant contribution of $1.4 million from EU ETS Carbon Emissions compensation. The company achieved a net income of $30.8 million, largely driven by a $20.1 million derivative income, resulting in adjusted earnings per share of $0.57. Flex LNG declared a dividend of $0.75 per share, totaling $3 per share for the year, reflecting a 12% yield. The company reinforced its robust financial position with $437 million in cash and a strong backlog, ensuring steady expectations for 2025. The anticipated time charter equivalent earnings for 2025 are in the mid-$70,000 range, with revenues projected between $340 million and $360 million, and an EBITDA forecast of $250 million to $270 million. Despite market challenges, Flex LNG remains optimistic with extensive contract coverage extending to 2032 and beyond, and plans to delist from the Oslo exchange to streamline compliance costs.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.