Guggenheim Starts Alto Ingredients (PEIX) at Buy
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Guggenheim analyst Shahriar Pourreza initiates coverage on Alto Ingredients (NASDAQ: PEIX) with a Buy rating and a price target of $11.00.
The analyst comments "We are initiating coverage of PEIX (Alto Ingredients) with a BUY rating and $11 price target. We believe that the PEIX story is a true turnaround that is entering the late innings – new mgmt. seized an opportunity to operationally reposition the largely fuel ethanol producer into a specialty ingredients company while simultaneously recapitalizing financially into what is effectively a 100% equity capitalized cash flow generation story. In this note, we discuss what we believe is a variety of potential upside glide paths that could at least sustain the cash flow momentum for PEIX from both fuel ethanol production, specialty alcohols ingredients, and co-products (i.e., food and beverage grade, sanitizers, pharmaceuticals, and corn byproducts). The bottom line: PEIX is set up as a small cap stock with a 19% cash flow yield and, with elimination of near-term liabilities in 2021, we believe will transform either into a shareholder total return story or M&A candidate (as either a buyer or seller)."
Shares of Alto Ingredients closed at $6.52 yesterday.
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