Updated Investment Thesis : Cheniere Energy
One of the best companies in the world
Hi there, we hope you had a fantastic week !
Today, we talk about:
The Week in the Markets
Our weekly summary with the best charts to understand what happened in the markets in 1 minute, along with explanations for those who want to dive deeper.
Equities, Bonds, Currencies, Alternative Assets, Macro Data, company commentaries, Earnings Season, and much more!
Equity Research
Cheniere Energy - Main LNG exporter from the U.S. A success story in the making, going from 0 MTPA of capacity in 2015 to the 55 MTPA it will reach in a few months. We analyze the company in detail, the LNG market, tailwinds and threats, its peers, and we value each of its assets (existing and under construction), giving our independent opinion on its current situation and future.
Alantra - Spanish financial services provider (Asset Management, Credit Portfolio Advisory, Investment Banking…) with almost half of its market cap in cash.
Portfolio Management
Including updates on our 3-stage monitor, comments on several companies, and our macro views, along with their respective movements in both equities and all asset portfolio. (We talk about Sanlorenzo, Golar LNG, Solaria, Catana…)
Investor Resources
Nota: Toda esta publicación está disponible en Español en nuestra web
Disclaimer: This publication is for educational purposes only and should not be taken or considered as investment advice under any circumstances. Please consult with your financial advisor before making any investment decisions.
The Week in the Markets
Summary
Shorter-than-usual week due to the Easter holiday, during which the markets took a breath. Volatility has decreased significantly (although it remains close to 30 due to all the uncertainty surrounding the decisions of the new U.S. administration). However, trading volumes have been much lower compared to the last two weeks.
The rotation out of the Mag7 into other sectors and geographies continues. It is quite striking in the summary chart that Mag7 were the only “index” to decline this week (dragging down the Nasdaq and the S&P 500 due to their weighting of over 30% in these indices – nearly 40% in the Nasdaq 100). NVIDIA dropped 8.5%, Meta 7.75%, Microsoft 6.6%… even Apple, which started the week with strong gains due to weekend news about tariffs being lifted on smartphones, computers, etc., ended the week in the red.
Another strong week of inflows into Europe (euro appreciation and rising European stock markets), as can be seen in one of the charts we include later. The same has happened with Japan, China, and other developed markets (this has been one of the weeks in 2025 with the widest spread in favor of developed vs. emerging markets).
The U.S. 10-year Treasury yield – the key player of the last two weeks – had a much quieter week, falling nearly 4%. Meanwhile, gold has once again reached all-time highs (the theory of debt monetization is gaining more weight – meaning interest rates lower than inflation in the coming years, with gold being one of the main safe havens, we’ll see). Oil also bounced back strongly due to U.S. sanctions on Iranian tankers.
Despite this week’s decline, volatility remains elevated and any piece of news could trigger sharp moves – as we saw this week with the escalating tension in the standoff between Trump and Powell. Trump is demanding rate cuts, while Powell stated that there is no rush to do so. Trump has the power to remove Powell; in fact, this week he said, “Powell’s termination cannot come fast enough!” – although markets currently assign only a 25% probability to this scenario. We believe that, if it were to happen, it would have a strong short- and medium-term impact on the dollar (it would be a “short dollar” event).
This upcoming week features very few relevant macroeconomic data points. The main headlines will revolve around corporate earnings (117 of the S&P 500 companies are reporting) and progress in the tariff negotiations, which are expected to take quite some time – even with countries like the UK or Japan (in theory, the “easy” agreements), deals are still weeks away from being finalized.
Macro highlights
Retail Sales
U.S. retail sales surged by 1.4% in March, in line with expectations and significantly higher than February’s modest 0.2% rise. The strength was broad-based but led by a sharp rebound in auto sales, suggesting that consumers may be front-loading purchases in anticipation of future price increases due to potential tariffs. Other categories such as building materials and food services also contributed positively, pointing to resilient household spending.
The breakdown in the chart highlights a notable reversal from January's deep slump, with retail categories across the board showing healthy growth. Despite tighter financial conditions and elevated uncertainty, consumer demand remains solid. This momentum reinforces the view that the U.S. economy continues to be driven by a robust consumer base, even as markets brace for potential trade-related headwinds.
US Jobless Claims
Initial jobless claims in the U.S. came in at 215K this week, down from 223K the previous week. These figures remain historically low and continue to indicate a tight labor market. Despite ongoing headlines about layoffs in certain sectors, weekly claims have yet to reflect any significant impact.
This resilience contrasts with the recent Challenger survey, which showed an uptick in announced job cuts during the month. The discrepancy suggests that while companies may be signaling reductions, the broader labor market remains strong for now, delaying any signs of weakness in official jobless data.
ECB Cuts rates
The ECB has lowered its main refinancing rate (rate at which banks can borrow funds from the ECB for one week) by 25 basis points to 2.40%, in line with expectations.
Marginal lending facility rate cut by 25 basis points to 2.65%, which is the interest banks pay for overnight borrowing from the central bank.
Deposit facility rate (rate the ECB pays banks for overnight deposits held at the central bank) was reduced by 25 basis points to 2.25%.
Christine Lagarde warned that downside risks to economic growth have increased due to escalating global trade tensions, which could hurt exports, investment, and consumption in the eurozone. The ECB statement omits the reference to interest rates remaining restrictive, which can be interpreted as a signal of a more dovish stance going forward. Lagarde questioned the relevance of the “neutral rate” concept in today’s uncertain environment.
Markets still expect a gradual rate-cutting cycle in 2025.
Interesting Data about markets this week & YTD
Gold has outperformed the S&P 500 over the last 5 years
Asset Flows into Europe
Liquidity in the markets vs S&P 500
Earning Season 2Q25
This week marks the start of the bulk of Q2 2025 earnings reports. A total of 117 out of the 500 companies in the S&P 500 will be reporting. While the main players so far have been in the financial sector, this week the spotlight will shift to industrial companies—that is, the ones most impacted by tariffs.
The highlight of the week will come Tuesday evening, with Tesla’s earnings report.
Cheniere Energy
Introduction
Cheniere Energy is the leading LNG exporter in the US (and the second-largest exporter in the world). It has been one of the key players in the LNG revolution since the commissioning of its first liquefaction terminal in 2016 (Sabine Pass, originally designed as an import terminal, but with the fracking revolution, they were pioneers in the idea of exporting LNG and adapted the facility accordingly).
Cheniere owns two terminals located on the Gulf of Mexico: Sabine Pass and Corpus Christi. The first is fully owned by its LP, Cheniere Energy Partners (CQP) — a listed company, of which Cheniere holds 50.6% ownership (and fully consolidates; the rest is held by Blackstone, Brookfield, and free float). Corpus Christi, meanwhile, is 100% owned by Cheniere. Additionally, the company has a “marketing” division dedicated to trading activities.
Both terminals have experienced rapid growth in recent years: Sabine Pass already has 30 MTPA of operational capacity, and Corpus Christi has 15 MTPA, with another 10 MTPA currently being brought online throughout 2025 and early 2026. Beyond this, Cheniere has already begun the permitting process to further expand both terminals.
Cheniere’s business model relies on long-term contracts (10–20 years) that generate predictable cash flows with tier-1 energy companies for a fixed amount of LNG per year (take-or-pay contracts). The typical contract structure is based on a fee of $2.5-3/MMBtu + 115% of the Henry Hub natural gas price (spot) — although this depends on the type of contract (FOB, DES, … ), as we will discuss later.
In terms of management, this is arguably one of the best-run companies in the world. They have consistently completed construction months or even a year ahead of schedule, their capital allocation strategy (buybacks, growing dividends, and organic growth) is textbook-worthy, and they are the industry benchmark for LNG thanks to their quarterly market updates and insight.
We have been following Cheniere since 2020, and it was in fact one of our top investments during the COVID period, delivering fantastic returns. Strongly benefited by the boom in US exports and high natural gas prices in recent years, Cheniere has become the absolute reference in the sector, thanks to the outstanding performance of its management, combining massive organic growth with a shareholder-friendly capital return policy.
Today we update our analysis of Cheniere Energy with:
A review of how the LNG industry works and the current environment
Analysis of Cheniere’s assets, contract structures, and growth plans
Status of its “peers” (Venture Global, Kinder Morgan, Sempra, Next Decade, Brookfield Infrastructure,… and the new US export terminals
Analysis of its debt, interest payments, and capital allocation strategy
A detailed EBITDA forecast with expansion plans and sensitivity to Henry Hub prices
Valuation and our independent opinion