Cowen Lifts PT on Capstone (CPST) to $2.70; New ND Flaring Restrictions, Transportation Could Drive Upside

Cowen reaffirms its Outperform rating on Capstone Turbine (Nasdaq: CPST) and raises its price target from $1.90 up to $2.70.

Analyst Robert Stone commented, New restrictions on flaring in ND could drive CPST penetration in the Bakken to power well-site equipment and natural gas infrastructure. Orders for two CA hospitals point to big potential for CHP/CCHP systems in that vertical. Transportation is the smallest segment today, but marine and truck applications could be big contributors to 5-year growth.

Last week, the ND Industrial Commission decided that new oil wells must submit a natural gas capturing plan to obtain state approvals. Due to a lack of infrastructure, more than 30% of natural gas in ND is flared (vs. a national average of >1%). CPST could power equipment to liquefy or transport gas. The ND Petroleum Council flaring task force indicated the industry plans to invest $1.7B in infrastructure over the next two years. Oil & Gas is the largest revenue segment for CPST ... but 90% of shale revenue thus far has come from the Marcellus, Eagle Ford, and Utica plays, Stone said.

For an analyst ratings summary and ratings history on Capstone Turbine click here. For more ratings news on Capstone Turbine click here.

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