FBR Capital Raises Price Target on Aemetis (AMTX) to $2 Following 3Q Beat
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FBR Capital reiterated a Market Perform rating on Aemetis (NASDAQ: AMTX), and raised the price target to $2.00 (from $1.75), following the company's 3Q earnings report. AMTX reported revenues of $39.3M and gross margin of 9.3% exceeding estimates, resulting in a $0.06 EPS beat. AMTX continues to generate a majority of revenue from its corn ethanol business as it pushes to bring Edeniq under the fold to drive more cellulosic ethanol production.
Analyst Carter Driscoll commented, "AMTX delivered a modest beat, mostly from higher-than-expected ethanol (up 4% YOY) and wet distiller's grain (WDG, up 9% QOQ) volumes and lower feedstock costs driving higher gross margin. For 3Q16, revenues of $39.3M and gross margin of 9.3% exceeded our estimates, resulting in a $0.06 EPS beat. AMTX made progress in India as it paid off its remaining debt to the State Bank of India, potentially opening AMTX's biodiesel plant to local financing opportunities. In addition, it received $6.5M in EB-5 financing that was released from escrow, and it is pursuing another $50M, for which it expects a faster approval and release process. AMTX also discussed its belief that it would come to a business resolution with Edeniq (i.e., Edeniq needs cash to grow) for their disputed merger rather than have it play for months or years in the court system. If this were to occur, it could have the potential to jump-start AMTX's revenue growth and drive toward consistent profitability. We raised our estimates for higher ethanol and WDG volumes, which causes our higher price target (to $2.00 from $1.75) but maintain our Market Perform rating."
Shares of Aemetis closed at $1.71 yesterday.
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