"Venture Global Stock Plunges Despite Political Support for LNG"

Venture Global's stock has taken a significant hit, plunging 36% in Thursday's trading, despite the political support for LNG projects under President Trump's administration. The liquefied natural gas (LNG) company's share price fell sharply on the heels of its recently published fourth-quarter report, which revealed disappointing sales and earnings, as well as a higher cost outlook for a major new project. This has left investors worried about the company's future profitability and has intensified bearish pressures on the stock.



The company's fourth-quarter report posted earnings per share of $0.33 on revenue of $1.52 billion, falling short of analyst estimates of $0.76 per share on sales of $1.92 billion. Venture's sales unexpectedly fell 6.7% year over year in the period, and sales and margin performance came in well below somewhat cautious expectations. Making matters worse, Venture also raised its cost outlook for its key Louisiana expansion project by roughly $2 billion, suggesting that profitability will continue to come in weaker than expected. The company had its initial public offering (IPO) in January, and the stock is now down 61% from market close on the day of its public debut.

The political support for LNG projects, as indicated by President Trump's policies, has the potential to influence investor sentiment towards Venture Global. President Trump's administration has prioritized increasing U.S. energy output and rolling back climate policies, which could create a favorable environment for energy companies like Venture Global. For instance, Trump issued an order to resume processing export permit applications for new LNG projects, stating, "We will drill baby, drill," and outlining a plan to maximize U.S. oil and gas production. This pro-energy sector stance could drive a recovery in energy sector IPOs in 2025, as rising commodity prices and optimism for pro-energy sector policies are expected to boost investor confidence. Additionally, Venture Global's IPO valuation, despite being sharply lowered from an initial target of $110 billion, still puts the company in the league of top U.S. energy companies, dwarfing high-profile names such as Occidental Petroleum, Marathon Petroleum, and Schlumberger. This indicates that there is still significant investor interest in the company, despite its current stock performance.

However, Venture Global's stock has been volatile, with a 36% drop in Thursday's trading and a 61% decrease from its IPO debut. This volatility could deter some investors, despite the political support for LNG projects. Furthermore, the company's complex business and ongoing legal battles may appeal to a smaller subset of investors, further limiting its access to capital. In summary, while the political support for LNG projects could influence investor sentiment towards Venture Global, the company's current stock performance and volatility are also important factors to consider.