Analyst Note| Stephen Ellis |
Cheniere has introduced a revised long-term capital allocation plan, which includes its first dividend, share buybacks, and debt reduction. Broadly, the plan matches our expectations; the debt reduction plans had been shared previously, and we had expected both share buybacks and a dividend announcement as the firm shifted to generating substantial amounts of free cash flow. We think the plan reflects Cheniere’s disciplined and transparent capital allocation approach. Given the lack of earnings impact from the announcement, we don’t plan to change our fair value estimates or wide moat ratings for the Cheniere entities.