Soleil Securities Downgrades BioFuel Energy Corp. (BIOF) to Sell
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Soleil Securities downgrades BioFuel Energy Corp. (NASDAQ: BIOF) from Buy to Sell and lowers their price target from $5.00 to $0.90.
The firm cited BIOF's "need for additional debt in order to cover both recent derivative losses as well as construction costs and debt service" as the reason for the downgrade.
In addition, the firm said, "After considering the required additional debt draw-down, we calculate that BIOF is currently trading at roughly $1.30 per gallon on an enterprise value basis. A significant amount of the enterprise value is consumed by the debt (roughly $1.10 per gallon in debt), which leaves very little room for equity value in our model."
BioFuel Energy Corporation produces ethanol in the United States.
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