Is the departure of Golar LNG chief executive Iain Ross a good thing or a bad thing?
Depends on who you ask.
To Evercore analyst Sean Morgan, Ross' departure — announced on Monday — should not "raise any unnecessary flags" about the company moving forward.
But Bank of America's Ken Hoexter downgraded the company from buy to underperform over concerns turnover at the top could create issues for the company.
"We believe the continued senior management turnover will drive difficulties in executing new FLNG projects [and] maintain consistent group strategy," Hoexter said in a note, while cutting Golar LNG's target price to $10 from $15.
Hoexter said Ross was the company's sixth chief executive in a decade, leading the company through the commissioning of the Hilli Episeyo, the simplification of its structure and shifted its focus to the LNG value chain.
"As such, Mr Ross' departure could lead to another reassessment in group strategy, with limited potential for positive incremental newsflow near-term," he said, noting Golar LNG's share price halved during Ross' tenure, from $20 to $10.
End of a chapter
For Morgan, Ross' departure was not a surprise and represented the end of a chapter for Golar LNG, having built out the company from a shipping operator to one with interests across LNG.
With Golar LNG Partners and Hygo Energy Transition sold to New Fortress Energy (NFE) in a $5bn deal in January, two floating LNG units left in its stead and a shipping fleet ready to be spun off "we would argue that the timing is right, both for Mr Ross and for [Golar LNG] to move on to the next stage," he said.
Morgan said the chief executive had no bearing on Evercore's investment thesis for the company and he maintained an outperform rating with a target price of $17.
"We believe Mr. Ross leaves GLNG in a stronger position financially, operationally, and structurally," he said.
"With the organisational complexity overhang removed and with much of GLNG’s inherent sum-of-the-parts now tied to its ownership stake in NFE, the new CEO can complete the separation of the FLNG and shipping assets and move forward with a pure-play structure."
