CHICAGO - LanzaTech Global, Inc. (NASDAQ: LNZA), a carbon recycling company, has increased its ownership in LanzaJet, Inc., a sustainable aviation fuel (SAF) provider, from approximately 23% to 36%. This ownership boost, announced today, follows a license and engineering agreement with Jet Zero Australia for the development of an ethanol to SAF plant, using LanzaJet's technology.
The deal, effective as of June 18, 2024, is the first of three anticipated equity issuances that could see LanzaTech's stake in LanzaJet rise to over 50% within the next 12 to 18 months. The exact timing depends on the progress of LanzaJet's global technology deployment.
LanzaJet's proprietary Alcohol-to-Jet (ATJ) technology, developed in collaboration with LanzaTech, the Pacific Northwest National Lab, and the U.S. Department of Energy, allows for the conversion of ethanol into SAF. The technology is central to LanzaJet's operations, including its reference plant, Freedom Pines Fuels, in Soperton, Georgia.
The increased stake aligns with LanzaTech's strategy to commercialize the ATJ process and capitalize on the growing demand for SAF. The aviation industry is increasingly seeking sustainable fuel options to reduce emissions, with SAF offering a potential reduction of at least 85% in aviation emissions, depending on technology and feedstock selection.
Dr. Jennifer Holmgren, CEO of LanzaTech, expressed excitement over the immediate value creation for stockholders and the potential for both companies to deliver a robust pipeline of projects. She highlighted the transaction's timing as pivotal, given the undeniable demand for SAF.
This news is based on a press release statement from LanzaTech Global, Inc.
In other recent news, LanzaTech Global, Inc. has been the subject of analyst attention from TD Cowen and Roth/MKM. TD Cowen initiated coverage on LanzaTech, assigning a Hold rating due to anticipated deployment challenges and fluctuating earnings in the near term. The firm set a price target of $3.00, based on the net present value of projected EBITDA.
Meanwhile, Roth/MKM maintained a Buy rating on LanzaTech and set a price target of $6.00. This valuation includes an additional $1 for LanzaTech's approximately 50% stake in LanzaJet. Roth/MKM's rating is contingent on LanzaTech's ability to manage potential challenges, such as slower-than-expected revenue growth and the impact of industry competition.
In another significant development, LanzaTech and Technip (EPA:FTI) Energies are in negotiations with the U.S. Department of Energy for a potential award of up to $200 million. This funding is meant to support the SECURE project, a joint initiative aimed at sustainable ethylene production from captured carbon dioxide. The project aligns with climate leadership objectives and is expected to create 200 construction jobs and 40 permanent positions.
These recent developments reflect the ongoing efforts of LanzaTech to navigate the complexities of scaling its operations and the potential impact of these efforts on the company's financial performance and market position.
InvestingPro Insights
LanzaTech Global, Inc.'s (NASDAQ: LNZA) recent strategic move to increase its stake in LanzaJet, Inc. is a significant step toward strengthening its position in the sustainable aviation fuel market. As the company focuses on scaling its Alcohol-to-Jet (ATJ) technology, investors and stakeholders are closely watching its financial health and market performance.
InvestingPro data reveals that LanzaTech Global has a market capitalization of $359.88 million, which is an important indicator of the company's size and market value. Despite the challenges faced by the company, such as a negative P/E ratio of -4.99, reflecting its lack of profitability in the last twelve months as of Q1 2024, there are positive signs in its revenue growth. The company has reported a significant increase in its revenue, with a growth rate of 61.58% over the last twelve months as of Q1 2024.
From an investment standpoint, two InvestingPro Tips stand out for LanzaTech Global. Firstly, analysts expect sales growth in the current year, which could indicate potential for increased revenue and market share. Secondly, the company holds more cash than debt on its balance sheet, providing a level of financial stability and flexibility to pursue growth opportunities such as the recent LanzaJet deal.
For investors seeking deeper insights and additional tips, InvestingPro offers a comprehensive list of metrics and analysis. There are 17 additional InvestingPro Tips available for LanzaTech Global, which can be accessed by visiting https://www.investing.com/pro/LNZA. To enhance your investing experience, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
With the aviation industry's shift towards sustainability and the anticipated equity issuances that could increase LanzaTech's stake in LanzaJet, these insights from InvestingPro could prove valuable for those keeping an eye on the company's trajectory.
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