Stifel analysts initiate AESI stock with Buy, $15 price target

On Tuesday, Stifel analysts began coverage on Atlas Energy Solutions Inc (NYSE:AESI) with a Buy rating, setting a price target of $15.00. Currently trading at $13.13, InvestingPro analysis indicates the stock is undervalued, with analyst targets ranging from $12 to $29. The firm’s optimism about the company’s prospects is rooted in several key factors, including Atlas Energy’s high-quality, low-cost mining operations and its efficient delivery system, notably the proprietary Dune Express.

Atlas Energy’s recent acquisition of the power generation business Moser is also seen as a significant growth opportunity, building on the company’s impressive 77.72% revenue growth over the last twelve months. In addition, Stifel analysts project strong free cash flow (FCF) expectations for the company beyond 2026, which they believe will support a robust 7.6% dividend yield and enable share buybacks. InvestingPro data confirms the significant dividend payments, with recent dividend growth of 56.25%.

Despite current market challenges with frac sand pricing, Stifel highlights Atlas Energy’s Dune Express conveyor delivery system as a unique advantage in the frac sand industry, which is expected to help maintain the company’s profit margins. The $15.00 price target set by Stifel is based on a 5.5x multiple of the company’s estimated 2026 adjusted EBITDA, aligning with historical valuations of U.S. land-centric Oilfield Service peers.

Stifel’s analysis acknowledges the near-term pricing headwinds in the frac sand market but underscores the potential for Atlas Energy’s differentiated offerings to sustain its margins. The Dune Express system, in particular, is seen as a key element that sets the company apart from competitors in the frac sand business.

The firm’s long-term outlook for Atlas Energy is bolstered by the expectation of a strong dividend yield and the possibility of share buybacks, driven by the company’s anticipated free cash flow generation in the coming years. This financial strength, combined with the strategic growth initiatives undertaken by Atlas Energy, forms the basis of Stifel’s Buy rating.

Investors and market watchers will likely monitor Atlas Energy’s performance closely, particularly in terms of its ability to capitalize on its proprietary systems and newly acquired assets to navigate the competitive landscape and deliver on the strong financial outcomes forecasted by Stifel. Despite the stock’s 38.55% decline year-to-date, InvestingPro reveals strong fundamentals with a healthy current ratio of 1.62 and additional positive indicators available in the comprehensive Pro Research Report, which provides deep-dive analysis of this and 1,400+ other US stocks.

In other recent news, Atlas Energy Solutions reported its first-quarter 2025 earnings, highlighting a significant discrepancy between earnings per share (EPS) and analyst expectations. The company posted an EPS of $0.01, substantially below the anticipated $1.06, yet it exceeded revenue forecasts with $297.6 million against the expected $234.1 million. Citi analyst Scott Gruber adjusted the price target for Atlas Energy Solutions, lowering it from $18.00 to $14.00 while maintaining a Neutral rating. This revision follows a reduction in estimated proppant sales for 2025 due to decreased drilling activity.

During its annual stockholders’ meeting, Atlas Energy Solutions ratified Ernst & Young LLP as its independent public accounting firm for the fiscal year ending December 31, 2025. The company also announced the election of three Class II directors to its board. Additionally, Atlas Energy Solutions completed the acquisition of Moser Energy Systems and launched the Dune Express logistics infrastructure. Analyst forecasts, including those from FactSet, suggest Atlas’s adjusted EBITDA for the second quarter could be around $76 million, with a full-year estimate of $302 million.

Atlas Energy Solutions has projected a total capital expenditure of $115 million for 2025 and anticipates flat or slightly increased Q2 volumes. Despite the challenges, the company remains committed to its strategic initiatives, as emphasized by CEO John Turner.

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