In a research report released today, Roth Capital analyst Craig Irwin initiated coverage on Pacific Ethanol (NASDAQ:PEIX) with a Buy rating and a $16.00 price target, which implies an upside of 40.5% from current levels.

Irwin said, “Following a precipitous drop in oil prices that compressed near-term ethanol profits, we expect the industry to readjust rapidly with profits rebounding in 1H15. Ethanol supplies were already tight before gas prices started falling, with miles driven positive from an improving economy. Consumers drive more when gasoline prices are cheaper, so miles driven are now an ethanol market tailwind. We see the incremental demand on top of an already tight supplydemand balance as supporting an improving profit outlook.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Craig Irwin has a total average return of -5.4% and a 44.2% success rate. Irwin is ranked #3131 out of 3427 analysts.