ADA-ES (ADES) RC Placements H2 Weighted; Cowen Comments on Recent Analyst Meeting

Cowen and Company affirms its Outperform rating and $35 target price on Advanced Emissions Solutions (Nasdaq: ADES) following a recent analyst event.

Analyst Robert Stone noted that RC placements look back-half 2014 weighted. The analyst commented, As of May, there were 9 leased/sold units and 5 retained ones, unchanged from March. Of the remaining 14 units, 8 are either about to start construction, have construction under way, or are nearing completion. Several of these could be online by the end of June; the rest will be in H2. There are also 6 units whose final destination has not yet been selected. However, negotiations are reportedly further along than they were a year ago for units that were operating by year end. Higher-tonnage installations would provide better economics, but the timing could be slower. With a pipeline of up to 20 locations, some with repeat customers, ADES has some control over that decision, suggesting upside to the 100 million ton target. In all cases, compliance Is required by April 2015, and there appears to be no shortage of willing financial partners.

Stone also sees a boost in equipment sales from new products, saying, We model residual equipment sales of about $26MM annually after MATS compliance. Reduced usage of consumables could lower upfront cost, require less material recovery, and trim the volume of waste byproducts. A new static mixer thoroughly blends powders before injection into the boiler, eliminating pockets of non-contact and reducing total chemical usage. A whole-system based CEM (Continuous Emissions Monitor) enables co-optimized injection of additives for Mercury, NOx, and SO2, and avoids commoditization of any single product.

For an analyst ratings summary and ratings history on ADA-ES click here. For more ratings news on ADA-ES click here.

ADA-ES closed at $22.51 yesterday.

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