UBS Lowers PT and Estimates on Gevo, Inc. (GEVO); Higher Legal Costs and Focus on Chemicals for Now

June 1, 2012 11:06 AM EDT
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Price: $3.72 --0%

Rating Summary:
    8 Buy, 4 Hold, 0 Sell

Rating Trend: = Flat

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    Up: 0 | Down: 0 | New: 0
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UBS maintains a 'Buy' on Gevo, Inc. (NASDAQ: GEVO) price target chopped from $23 to $13.

Analyst, Mahavir Sanghavi, said, "We believe Gevo’s success with re-examination and in-turn rejection of Butamax’s key patent claims likely helps in the final outcome. Based on our checks with the industry contacts, we believe that the most likely outcome in the case would allow Gevo to produce and sell Isobutanol into the chemicals market only for now."

"We lower our estimate of Gevo’s production to 165M gal in 2015 versus 290M gal previously as we take a conservative view of the capacity ramp and we push sales to fuels market beyond 2016. We raise our 2012 and 2013 opex by $10M each on higher legal costs. As a result, we lower our 2012 and 2013 EBITDA estimates (after minority interest) to -$61M and -$40M from - $.7M and -$9M previously." (FY12 EPS loss cut from (1.85) to (2.70) and FY13 from (1.18) to (2.25))

For an analyst ratings summary and ratings history on Gevo, Inc. click here. For more ratings news on Gevo, Inc. click here.

Shares of Gevo, Inc. closed at $6.07 yesterday.

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