What happens to stocks if AI loses momentum?
On Wednesday, Piper Sandler analyst Derek Podhaizer initiated coverage on Atlas (NYSE:ATCO) Energy Solutions Inc (NYSE:AESI), assigning an Overweight rating to the stock with a price target of $22.00. Currently trading at $17.47 and near its 52-week low of $16.98, InvestingPro analysis suggests the stock is slightly undervalued. Podhaizer’s endorsement comes despite the company being one of the most controversial in the oilfield services (OFS) sector.
The analyst noted that while Atlas Energy Solutions might experience some volatility in the near term due to the ramp-up of the Dune Express project and current macroeconomic uncertainties, the firm’s outlook remains positive. With impressive revenue growth of 72% over the last twelve months and a market capitalization of $2.1 billion, Piper Sandler sees potential in the company’s various growth opportunities, especially in a deflationary North American market.
Atlas Energy Solutions is anticipated to recover from a prolonged period of earnings revisions and rating downgrades. Podhaizer highlighted the expected benefits for the company from an improving rate of change, indicating a shift in the earnings trajectory.
The Overweight rating suggests that Piper Sandler believes Atlas Energy Solutions has a higher potential for returns compared to the overall sector or market. The $22.00 price target set by Piper Sandler represents a significant level of confidence in the company’s future performance.
The coverage assumption and optimistic price target from Piper Sandler come as a strong vote of confidence for Atlas Energy Solutions, which has faced its share of skepticism within the industry. The firm’s focus on the company’s long-term growth prospects and potential market advantages is a noteworthy perspective for investors considering AESI stock. For deeper insights into AESI’s valuation and growth metrics, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company’s financial health, market position, and growth potential.
In other recent news, Atlas Energy Solutions Inc. reported its fourth-quarter 2024 financial results, which fell short of analysts’ expectations. The company posted an earnings per share (EPS) of $0.13, missing the forecasted $0.17, and reported revenue of $271.3 million, slightly below the projected $273 million. Despite this, Atlas Energy Solutions is optimistic about 2025, projecting significant growth with an Adjusted EBITDA target exceeding $400 million. The company has secured approximately 80% of its proppant capacity under contract for 2025, providing stability for its revenue outlook.
In terms of strategic initiatives, Atlas Energy Solutions completed the Dune Express conveyor system and launched a driverless delivery operation, marking advancements in oilfield logistics. The acquisition of Moser Energy Systems signals the company’s entry into the distributed power generation market, aiming to bolster its long-term position. Benchmark analyst Kurt Hallead adjusted the price target for Atlas Energy Solutions to $25, maintaining a Buy rating, reflecting a revision in the company’s earnings projections for the coming years. Hallead also anticipates a positive pricing trend for the company as 2026 approaches.
Atlas Energy Solutions has been proactive in navigating market dynamics, with plans to expand power generation capabilities and increase proppant sales in 2025. The company’s foresight in securing contracts and advancing logistical innovations positions it for potential market improvements. These developments reflect Atlas Energy Solutions’ strategic growth initiatives and its efforts to enhance its competitive stance in the industry.
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