Bullish indicating open at $55-$60, IPO prices at $37
Tuesday, Clean Energy Fuels (TSX:EFR) Corp. (NASDAQ:CLNE) saw its price target reduced by Jefferies from $4.00 to $2.80, while the firm maintained a Buy rating on the stock. Trading at $2.02 and down 11% in the past week, the stock appears undervalued according to InvestingPro analysis. Despite a recent decline in the stock’s value following the earnings report, Jefferies believes the market has overlooked the company’s strong performance in the fourth quarter.
The company’s guidance for 2025, projecting an EBITDA between $50 million and $55 million compared to approximately $77 million in 2024, has been a focal point for investors. With a current market capitalization of $459 million and a solid current ratio of 3.06, the company maintains strong liquidity despite operating challenges. This forecast is influenced by the expiration of the Alternative Fuel Tax Credit (AFTC) and pressures on D3 Renewable Identification Numbers (RINs).
Jefferies analyst Lloyd Byrne provided insight into the situation, suggesting that there might be potential for upside. Factors such as an increase in the Low Carbon Fuel Standard (LCFS) credits in the second half of the year, the possibility of the AFTC being reinstated, clarity on the 45Z tax credit, and higher volumes could all contribute to a more favorable outcome for Clean Energy Fuels.
Byrne’s analysis indicates that at the current share price levels, Clean Energy Fuels appears to be oversold. Looking ahead, the analyst sees a "constructive set-up" for the company in 2026, implying a positive outlook for the stock’s future performance.
Investors and market watchers will likely keep an eye on Clean Energy Fuels as it navigates the changing landscape of tax credits and environmental regulations, which are integral to its financial projections and stock valuation. While currently unprofitable, analysts expect the company to return to profitability this year. Get deeper insights and access to comprehensive financial analysis with InvestingPro, which offers exclusive ProTips and detailed valuation metrics for informed investment decisions.
In other recent news, Clean Energy Fuels reported strong fourth-quarter 2024 financial results, exceeding expectations with an earnings per share (EPS) of $0.01, surpassing the forecasted loss of $0.0046. The company’s revenue also outperformed projections, reaching $109.3 million against an anticipated $99.86 million. Despite these positive results, Raymond (NSE:RYMD) James adjusted its price target for Clean Energy Fuels from $5.00 to $4.00, while maintaining a Strong Buy rating. Analyst Pavel Molchanov noted the company’s expansion into renewable natural gas (RNG) production as part of its growth strategy. The company’s fourth-quarter performance included selling approximately 62 million gallons of RNG. Looking forward, Clean Energy Fuels projects consolidated revenue of approximately $400 million for 2025, with significant investments planned in RNG projects. The company anticipates selling 246 million gallons of RNG in 2025, with capital expenditures projected at $104 million. Regulatory uncertainties and macroeconomic factors continue to pose challenges for Clean Energy Fuels, impacting its future profitability and guidance.
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