Jefferies raises Gevo stock price target to $1.50 on OBBBA passage

Investing.com - Jefferies has raised its price target on Gevo , Inc. (NASDAQ:GEVO) to $1.50 from $1.10 while maintaining a Hold rating ahead of the company’s second-quarter 2025 earnings report. The company, currently trading at $1.56 with a market capitalization of $362 million, has shown impressive revenue growth of 145% in the last twelve months, according to InvestingPro data.

The price target increase follows the passage of the OBBBA legislation, which extends the 45Z tax credit and eases Indirect Land Use Change (ILUC) language, according to Jefferies.

Jefferies has raised its 2025 and 2026 EBITDA estimates for Gevo by approximately 2% and 13% respectively, citing steady growth in renewable natural gas (RNG) volumes and noting that a lower carbon intensity (CI) score is unlocking capital.

The firm also points to Gevo’s ethanol monetization ramping up with carbon capture and storage (CCS) support, while the company’s pivot to ATJ-30 (alcohol-to-jet) improves capital efficiency.

The new $1.50 price target reflects what Jefferies describes as "higher 45Z value" resulting from the recent legislative changes.

In other recent news, Gevo Inc. reported its Q1 2025 financial results, revealing a revenue of $30.9 million, which fell short of the forecasted $31.91 million. Despite the revenue miss, the company continues to focus on its strategic initiatives, including the monetization of 45Z tax credits and expanding its alcohol-to-jet (ATJ) plant capacity. In a significant move, Gevo has agreed to sell its subsidiary Agri-Energy, LLC to A.E. Innovation, LLC for $7 million, which is expected to save the company approximately $3 million annually by eliminating idle facility costs. The transaction is anticipated to close by the end of 2025, with Gevo receiving $2 million in cash at closing and an additional $5 million in future payments. Furthermore, H.C. Wainwright maintained a Buy rating on Gevo with a price target of $14.00, highlighting the sale as a positive step for the company. In executive news, Gevo appointed Oluwagbemileke Agiri as the new Chief Financial Officer, succeeding L. Lynn Smull. Additionally, Lindsay (NYSE:LNN) Fitzgerald has been promoted to Chief Advocacy and Communications Officer to lead policy advocacy and public communications efforts. These developments reflect Gevo’s ongoing strategic focus on financial stability and growth in the renewable energy sector.

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