Alternative energy has been the subject of much speculation. Whilst culturally we are turning towards greener initiatives, the markets haven’t been particularly receptive to alternative energy stocks over the last year.
Funding headwinds, inflationary pressures, and supply chain issues have all impacted the growth of renewable’s; but as these stocks depreciate over the short term; we are offered eye-opening discounts to firmly rooted companies that are in good stead for the green transition. Today’s focus – Clean Energy Fuels (NASDAQ: CLINE), the largest compressed natural gas/liquified gas provider in the U.S.
Matthew Blair, an analyst from Tudor Pickering backs Clean Energy on its impressive contracts that clearly demonstrate the company’s renowned positioning, in particular, the company’s 20 dairy farm contract wins for renewable gas deployments. Blair maintains a relatively low price target of $7.50 but upgrades the stock from Hold to Buy, on the grounds of an ‘extremely appealing’ valuation.
On a wider analysis of the green transition, Craig-Hallum analyst Eric Stine believes that Clean Energy Fuels could be a low-priced entry to the RNG market, which he believes to be a critical benefactor in the decarbonization of transport and the minimization of our carbon footprint.
The rise in price target from $20 to $27 came after a solely focused RNG investor day; which alluded to the company’s overall plans and the growing market opportunity. Stine believes the alternative energy market to be a multi-decade growth theme; and one that is geared up for long-term support.
Over as Evercore ISI, Clean Energy received a double upgrade from Todd Firestone from Underperform to Outperform, settling on an $11 price target. Firestone primarily bases his thesis on Clean Energy’s clear-cut position as the largest compressed natural gas/liquified natural gas provider in the U.S, and hence the current pricing, as well as the risk/reward, is too ‘attractive’ to miss.
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Oliver is a financial writer and analyst specialising in the US stock market, with years of personal experience in understanding micro/macroeconomic structures, market trends and fundamental analysis.