On Monday, Piper Sandler maintained its Neutral rating on Danimer Scientific (NYSE:DNMR) with a steady price target of $1.25. The decision follows a thorough review of the company's first quarter 2024 earnings, second quarter and full-year guidance, and progress in new customer negotiations and delivery timelines.
The financial firm's assessment was influenced by Danimer Scientific's recent earnings release, which provided insights into the company's performance and future expectations. The analyst cited the company's updated financial model, which now includes the latest earnings and guidance data, as a basis for the continued Neutral stance.
Piper Sandler's price target of $1.25 per share is derived from a valuation model that applies a 60.8 times multiple to the company's expected 2025 earnings before interest, taxes, depreciation, and amortization (EV/EBITDA). This multiple was then discounted by 40% to 36.5 times to account for the high level of uncertainty and the earnings' sensitivity to new customer volume increases and sales.
The firm's analysis indicates a cautious approach, reflecting the uncertainties associated with Danimer Scientific's growth trajectory and its ability to secure and fulfill new customer contracts. The price target and rating are based on the current financial metrics and the potential risks and rewards associated with the company's business model.
Investors and stakeholders in Danimer Scientific are provided with an updated perspective on the company's valuation, taking into account the latest financial information and market conditions as of the first quarter of 2024. Piper Sandler's evaluation serves as a gauge of the company's standing in the market and its potential future performance.
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