Ricardo Pillai
3 min read
In This Article:
We came across a bullish thesis on New Fortress Energy Inc. (NFE) on TheOldEconomy Substack. In this article, we will summarize the bulls’ thesis on NFE. New Fortress Energy Inc. (NFE)'s share was trading at $2.55 as of 2nd June. NFE’s trailing and forward P/E were 8.99 and 212.77 respectively according to Yahoo Finance.
An agricultural field full of solar panels, capturing the sun's energy for the company.
New Fortress Energy (NFE) recently experienced a sharp decline in its share price and bond values following a disappointing Q1 2025 report, which showed a significant net loss and a drop in revenue. The company’s 2026 bonds fell 28%, trading at about 57 cents on the dollar and offering a yield to maturity exceeding 50%, while the 2029 bonds dropped 42%, presenting a more speculative but potentially lucrative investment opportunity. Despite operational challenges, especially in Puerto Rico where political and regulatory resistance has stalled key growth projects and delayed payments, NFE holds promising assets such as the near-complete Nicaraguan power plant and expanding Brazilian LNG operations.
The company plans to sell its Jamaican assets for approximately $1 billion, helping to improve liquidity. Management aims to shift debt from unsecured corporate borrowings to project-level financing secured by long-term contracts with investment-grade counterparties, potentially reducing corporate leverage and refinancing the debt at more favorable terms. The 2026 notes appear well-covered, with sufficient liquidity, expected asset-sale proceeds, and adjusted EBITDA to meet obligations, making default unlikely. Conversely, the 2029 bonds, while senior secured, carry more risk due to their subordinate position and ongoing refinancing uncertainties.
However, these bonds offer significant upside if NFE successfully repays the 2026 debt and stabilizes its operations, with a risk-reward ratio favoring speculative investors willing to accept potential haircuts in exchange for large returns. Overall, the investment thesis rests on NFE’s ability to execute asset sales, secure contract renegotiations, and refinance debt amid political and operational headwinds, making the 2026 bonds a hold-to-maturity play and the 2029 bonds an opportunistic, high-risk trade.
Previously, we have covered NFE in March 2025 wherein we summarized a bullish thesis by Unemployed Value Degen on Substack. The bullish thesis on New Fortress Energy highlighted strong EBITDA growth, debt reduction through asset sales, and political shifts in Puerto Rico, supporting a near-term share price target of $30 and longer-term upside.
