UPDATE: Credit Suisse Starts Vertex Energy (VTNR) at Outperform
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Credit Suisse analyst Manav Gupta initiates coverage on Vertex Energy (NASDAQ: VTNR) with a Outperform rating and a price target of $13.00.
The analyst comments "We believe as conventional petroleum refineries start to pivot to RD, they will experience multiple expansion, and we are witnessing this with Calumet (CLMT, Not Covered). CLMT trades at 6.7x 2024E consensus EBITDA, while VTNR trades at 1.97x our 2024E EBITDA. In our view, VTNR is not getting enough credit for its RD project because it still has not taken ownership of the Mobile refinery, while construction at CLMT’s Great Falls is already progressing at the facility, with the first production expected in April 2022. We expect VTRN to close the Mobile acquisition in 1Q 22, and this is an important positive catalyst which could potentially drive a re-rating (multiple expansion). A second catalyst is the closing sale of the motor oil collection and recycling assets, as this helps with balancing the $75M in cash outflows associated with the purchase of Mobile vs. the $90M in cash inflows associated with the divesture."
Shares of Vertex Energy closed at $5.01 yesterday.
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