Atlas Energy Solutions Inc (AESI) PT Lowered to $10 at Piper Sandler

Piper Sandler analyst Derek Podhaizer lowered the price target on Atlas Energy Solutions Inc (NYSE: AESI) to $10.00 (from $12.00) while maintaining a Neutral rating.

The analyst commented: "AESI Enters the Larger MW Market; OFS remains challenged. In an effort to participate in the more attractive/high return power markets, similar to SEI, PUMP, and LBRT, AESI announced its initial order of larger MW units totaling 240MW, comprised of 4MW/unit natural gas reciprocating engines for $278mm or $1.2mm/MW. This type of kit is much different than the <1MW/unit natural gas generators the company has from its Moser acquisition. With the newly ordered 240MW, AESI expects to reach >400MW deployed by early 2027, including 190MW of Moser assets. Supporting its decision to enter the larger MW market, mgmt pointed to an opportunity set reaching 2GW of demand, consisting of 50% related to data centers, 40% in C&I, and 10% in O&G. While not getting into specifics, mgmt noted potential contract duration extends beyond 10 years and expects its return profile to be similar to its peers in the space. For Moser, mgmt expects its smaller power units to interplay with its larger units in a bridge power capacity as it ramps up power projects. For its base business, OFS remains challenged, driving a 30% EBITDA miss on the quarter plus the suspension of its quarterly dividend. As a result, AESI is down 20% over the past week vs. +1% OIH. Looking ahead, mgmt expects the Dune Express to exceed 10mm tons in 2026 with total volumes likely in the +/- 22mm ton range."

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