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On Monday, Stifel analysts maintained a positive stance on TETRA Technologies Inc. (NYSE:TTI) shares, reiterating a Buy rating and a $7.00 price target. The endorsement comes after analysts Stephen Gengaro’s two days of meetings with the company’s management in Toronto and Montreal. Currently trading at $4.15, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $5.00 to $7.00. Gengaro expressed increased confidence in the projected $674.9 million revenue for 2025, which would mark an 11.4% year-over-year growth from the current trailing twelve-month revenue of $617.73 million.
The anticipated revenue increase is attributed to several key factors. Firstly, TETRA Technologies is expected to benefit from increased deepwater activity, having secured a three-well CS Neptune project and a multi-well, multi-year project in Brazil for its high-density offshore completions fluids. Secondly, there is an expected surge in EOSE battery deployments, where TETRA has an agreement to supply at least 75% of the electrolyte demand for EOSE’s zinc bromide-based batteries. Lastly, a modest growth is projected for the company’s high-EBITDA-margin calcium chloride business. The company’s strong financial health is evidenced by its healthy current ratio of 2.33, indicating solid liquidity to support these growth initiatives. Notably, the stock has shown impressive momentum with a 25% return over the past six months.Want deeper insights? InvestingPro subscribers have access to over 30 additional financial metrics and exclusive analysis for TETRA Technologies.
Additionally, discussions during the meetings touched on TETRA Technologies’ strategies for funding bromine production from its acreage in the Smackover formation. The company also has plans to deploy its Oasis desalination solution at a commercial scale, likely in 2026, while continuing pilot projects throughout 2025. These developments suggest a strategic approach to growth and expansion, reinforcing the analyst’s positive outlook on the stock’s future performance. Investors should note that the company’s next earnings report is scheduled for February 27, 2025.
In other recent news, TETRA Technologies reported earnings of $23.5 million and revenue of $142 million in its third-quarter 2024 financial results, marking a 6% decline from the previous year. The company secured significant contract wins, despite market challenges, and anticipates a robust first half of 2025, with projects in the Gulf of Mexico and Brazil expected to contribute to growth. Clear Street has initiated coverage on TETRA Technologies, giving it a Buy rating with a price target of $8.00. The firm’s optimism is based on the company’s diversification, reduced correlation with the Oil & Gas cycle, and the potential value of its industrial Calcium Chloride business and bromine optionality. Clear Street expects TETRA’s EBITDA to increase by 34% next year, driven by high-margin projects. The firm also noted TETRA’s improved financial position, with reduced debt leverage and a healthy current ratio of 2.33. TETRA is advancing its Arkansas bromine project and is preparing for commercial plant operations in water desalination by 2026. These are recent developments in TETRA Technologies.
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