Benchmark lifts Atlas Energy stock target to $28 on Moser acquisition

On Tuesday, Benchmark analyst Kurt Hallead raised the price target on Atlas (NYSE:ATCO) Energy Solutions Inc (NYSE:AESI) to $28 from the previous $23, while maintaining a Buy rating on the stock. The company, currently trading at $25.22 and near its 52-week high of $26.86, has demonstrated impressive momentum with a 48.82% return over the past year. According to InvestingPro analysis, the stock appears slightly undervalued based on its Fair Value metrics. The adjustment follows Atlas Energy Solutions ’ announcement of its plans to acquire Moser Energy Systems for $220 million. This acquisition is a mix of $180 million in cash and approximately 1.7 million shares of AESI stock.

Atlas Energy Solutions will use its existing delayed draw term loan facility to cover the cash portion of the deal. With a moderate debt-to-equity ratio of 0.47 and strong revenue growth of 48.67% in the last twelve months, the acquisition is in line with the company’s strategic approach to drive growth by branching out into the burgeoning distributed power market. Moser Energy Systems owns a fleet of over 1,000 mobile natural gas-powered generators, which supply a combined 212MW of power. These units are designed to operate on raw wellhead natural gas, offering a 30% cleaner burning alternative to diesel generators.

Hallead’s revised price target comes with an updated EBITDA forecast for Atlas Energy Solutions, with a 6% increase for the year 2025 and a 9% increase for 2026. These projections take into account the expected contributions from the Moser Energy Systems acquisition. According to Hallead, the updated EBITDA estimates are 4% below the consensus for 2025 but 3% above for 2026. The company’s current EBITDA stands at $261.94 million, and InvestingPro subscribers can access detailed financial health scores and 8 additional key insights about AESI’s growth potential.

In other recent news, Atlas Energy Solutions has been making strategic moves, including the acquisition of Moser Energy Systems and Moser Acquisitions, Inc. for $220 million each. These acquisitions, slated to close by the end of the first quarter of 2025, are expected to diversify Atlas Energy’s portfolio and enhance its offerings in the power solutions sector. The company has also reported a 6% quarterly increase in revenue, reaching $304 million, and announced a dividend increase to $0.24 per share and a $200 million share repurchase program, indicating confidence in its financial health.

RBC Capital, Citi, and Stephens have adjusted their price targets for Atlas Energy to $28, $24, and $29 respectively, reflecting the company’s growth potential and recent strategic developments. However, Atlas Energy has also received a series of downgrades from major firms including BofA Securities, Goldman Sachs, and Citi, shifting the stock rating from Buy to Neutral due to concerns over the company’s financial forecasts.

Despite these downgrades, Atlas Energy maintains strong fundamentals, with revenue reaching $925.76M and year-over-year growth of 48.67%. These are the recent developments for Atlas Energy Solutions.

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