Woodside Energy Group Ltd (ASX: WDS) shares are enjoying their third consecutive day of gains today.
Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock are up 3.1% in early afternoon trade on Wednesday, changing hands for $24.78 apiece. This sees shares up 6.8% since last Friday's close.
For some context, the ASX 200 is down 0.8% over this same time.
While this short-term outperformance will certainly be welcome news to stockholders, Woodside shares remain down 17.2% since this time last year, pressured in part by lower oil and gas prices.
However, it's not a looming rebound in energy prices that just saw Citi's James Byrne upgrade his outlook for Woodside in 2025 (courtesy of The Australian).
How Louisiana could boost Woodside shares
Byrne upgraded Woodside shares to a neutral rating and upped his price target by 9% to $24.00, with an eye on the Louisiana LNG export terminal the company is currently developing in the United States.
Woodside acquired the US Gulf Coast project in 2024 and is seeking to divest 50% of the project in quick order.
Bryne believes that the timeline looks "overly ambitious".
But Woodside shares could garner tailwinds if the company succeeds in finding an investment partner over the coming months. Bryne pointed out that domestic fund managers are underweight on the ASX 200 energy stock, meaning a successful 50% divestment of the LNG export terminal "could be a pain trade".
According to Bryne (quoted by The Australian):
Consider if negotiations are advanced enough to transact in the coming months, this should see both sentiment and fundamentals improve, and with how far the share price has already fallen, the market has already priced in the deterioration in portfolio quality from the LNG acquisition.
We therefore no longer believe sell is the right call.
Bryne isn't recommending Woodside shares as buy yet though, saying he preferred Santos Ltd (ASX: STO) shares.
What is the Louisiana LNG terminal?
Commenting on the export terminal when Woodside released its full-year results on Tuesday this week, CEO Meg O'Neill said:
Louisiana LNG is an advantaged US Gulf Coast project, fully permitted for 27.6 Mtpa of LNG production, with a competitively priced EPC contract with Bechtel and with civil works largely de-risked.
This compelling opportunity is attracting interest from high-quality partners, and we are progressing towards readiness for a final investment decision from the first quarter of 2025.
Asked in a post-presentation press conference how Woodside will decide on the best partners for the project, O'Neill added, "As I've stated previously, we will exercise discipline in the selection of our partners and key decisions in relation to Louisiana LNG to maximise shareholder value."
Woodside shares closed up 2.8% following the company's 2024 results release.
