UPDATE: Stifel Downgrades Vertex Energy (VTNR) to Hold
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Stifel analyst Mike Hoffman downgraded Vertex Energy (NASDAQ: VTNR) from Buy to Hold with a price target of $1.50.
The analyst comments "We are downgrading Vertex Energy (VTNR, Hold, $2.34) to a Hold as the stock has traded beyond fundamentals. Over the last month shares of VTNR have increased by 185% rising from $0.82 to $2.34, exceeding our DCF valuation of $1.50 per share. Our investment thesis remains predicated on VTNR’s ability to protect its balance sheet and improve operating reliability of its Used Oil portfolio. VTNR fundamentals should improve in 4Q20 and into 2021. The outlook for the Industrial Waste segment is very constructive. However, our DCF based valuation would suggest VTNR would need to sustain a long-term FCF growth rate of 17% assuming FY21 FCF of $3.2mm or FY21 FCF would need to start at $13.5mm with our long-term FCF growth assumption of 4.1% to support the current $2.34 price."
Shares of Vertex Energy closed at $2.34 yesterday.
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