B.Riley downgrades Golar LNG stock to Neutral on valuation concerns

B.Riley downgraded Golar LNG (GLNG) to Neutral from Buy, maintaining a $44.50 price target, citing valuation concerns despite the stock trading near its 52-week high and an 8.49% weekly gain. The downgrade stems from a reassessment of the company's $16.8 billion adjusted EBITDA backlog, which excludes commodity upside and inflationary adjustments, and difficulties in valuing potential future projects beyond 2028. This move follows GLNG's mixed Q2 2025 financial results, where revenue of $75.1 million surpassed expectations, but EPS of $0.25 slightly missed analyst forecasts.

Analysis

B.Riley has downgraded Golar LNG Ltd. (GLNG) to Neutral from Buy, maintaining its price target of $44.50, a move prompted by valuation concerns after the stock gained 8.49% in the past week to trade near its 52-week high of $45.03. The downgrade stems from a valuation reassessment based on GLNG's $16.8 billion adjusted EBITDA backlog, a figure which B.Riley notes conservatively excludes potential commodity upside and full inflationary adjustments. The analysis highlights a significant concentration in the backlog, with $13.8 billion tied to two 20-year FLNG contracts in Argentina that include upside potential. However, the firm cited difficulty in valuing potential projects beyond 2028 due to a lack of detailed information on new contracts. This cautious outlook is juxtaposed with GLNG's mixed Q2 2025 results, where the company posted a 2.6% revenue beat at $75.1 million but recorded a slight 3.74% earnings per share miss at $0.25, suggesting solid top-line performance but pressure on profitability.

Key Decisions for Investors

• Given the stock is trading near its 52-week high and B.Riley's downgrade is based on valuation, investors who have benefited from the recent 8.49% weekly gain might consider trimming positions to realize profits.
• Investors should closely monitor management guidance for any new contract announcements that would provide earnings visibility beyond 2028, as this is the primary source of uncertainty cited by the analyst.
• While the revenue beat indicates operational strength, the slight EPS miss warrants attention; any further erosion in profitability could validate the more cautious outlook and pressure the stock.