A few upgrades and downgrades to tell you about today..
Evergreen Solar (ESLR) upgraded from Sell to Hold by Citi
“With ESLR more clearly defining its exposure to a Lehman Bros. bankruptcy, the worst-case scenario is now well defined. The primary issue is dilution as ESLR might not recover funds on the issuance of ~30MM shares to LEH as part of a share lending agreement. Although ESLR may also be out the ~$40MM it has … Read the rest
Verasun, an ethanol producer, just filed a notice with the SEC indicating that their third quarter losses will be much higher than expected. Originally, the company was expected to post a net loss $2.4 million. However, the regulatory filing shows that that the company expects a net loss of between $63 million and $100 million. The company’s stock is expected to lose 40 to 65 cents per share as a result.
In the filing, Verasun … Read the rest
Verasun Energy (VSE) announced the startup of its 110 million gallon/year ethanol plant near Dyersville, Iowa, bringing the total number of production plants to 14 with a total capacity of more than 1.4 billion gallons.
“We are pleased to bring another large-scale, environmentally friendly ethanol production facility on-line in the state of Iowa,” VeraSun CEO Don Endres said. “The state continues to be a leader in renewable fuels production, helping our nation to reduce … Read the rest
Pacific Ethanol, which posted a second quarter loss of 2.2 million, is attempting to purchase Phoenix Bioindustries and its ethanol plant in Goshen, CA. If the deal goes through, this will put Phoenix in control of the first ever corn-to-ethanol plant in California. Currently, Pacific Ethanol is only involved in distributing ethanol. The purchase of the plant will allow them to break into the far more lucrative production channel, with average profit margins of … Read the rest
According to StreetInsider.com, Soleil Securities raised its price target on VeraSun (VSE) from 3.75 to 4.15 but maintained its sell rating. Uh OK.. got it. So you think the price will rise from current levels but it should still be sold.
The firm also raised its 08 EPS estimate from .10 to .49 and its 09 estimate from .02 to .41 saying that it now reflects management guidance and the current macro ethanol markets. … Read the rest
According to StreetInsider.com, Soleil Securities downgraded BioFuel Energy (BIOF) to Sell citing the company’s need for additional debt in order to cover hedging losses and construction costs.
They also reiterated their sell rating on Pacific Ethanol (PEIX) and lowered the price target to 1.50 from 2, saying “the outlook remains weak given the forecasted ehtanol environment and their debt heavy balance sheet. As we are modeling negative margins going forward, we do not anticipate … Read the rest
Morgan Stanley is out with a note today stating that VeraSun Energy (VSE) beat consensus and their Q2 estimates by a wide margin yet they still rate the stock equal weight due to the "tough ethanol market." That being said Morgan Stanley believes VSE has the best risk reward profile among the pure play ethanol producers.
Morgan Stanley also reported, "Given our outlook for increased industry capacity and a challenging cost profile we recommend investors … Read the rest
According to StreetInsider.com, Biofuel Energy (BIOF) has announced that it had realized approximately 26.1 million in losses resulting from closing out various corn, ethanol and nat gas hedges and has an additional 20 million in unrealized paper losses at current prices.
The Company put the corn and natural gas hedges in place to minimize the impact of rising prices. However, the plummet in the corn market exposed them to large unrealized losses under its … Read the rest
Pacific Ethanol (PEIX) reported a big loss this morning of .23/share, much larger than the .12/share loss analysts had been expecting as soaring corn prices eroded profits. Revenues came in on the light side as well at 198 million, vs the estimate of 206 million
Shares are down more than 15% this morning and the stock is once again trading below the 50 day moving average.… Read the rest
Verenium (VRNM) is soaring nearly 50% this morning on news that oil giant BP is paying the company 90 million for access to its cellulosic ethanol technology. The two companies have created a special entity as part of the deal and the technology developed will be jointly owned and licensed.… Read the rest