In a research report released Monday, Roth Capital analyst Craig Irwin reiterated a Buy rating on Pacific Ethanol Inc (NASDAQ:PEIX) with a $16 price target, after hosting investor meetings with CFO Bryon McGregor that reinforced the analyst’s constructive view on the company’s outlook.
Irwin wrote, “We hosted meetings with Pacific Ethanol CFO Bryon McGregor, and our key take away is the larger Pacific Ethanol, post closing of the Aventine merger on July 1, should be well positioned to capitalize on positive ethanol market fundamentals.” The analyst continued, “While we remain comfortable with our bull thesis based on tight supply and growing demand, we are reducing 2015 estimates primarily for industry debottlenecking above our expectations.”
“Recent weekly industry production above 15.2bn gal (or 992kbd) shows industry wide debottlenecking is adding ~500m gal to available capacity. Based on 4% YTD growth in miles driven, demand growth is likely to match or exceed this level, and continue into 2016, in our view. We also note summer driving has yet to start in earnest, so our revised estimates could prove conservative, particularly with hotter months reducing available output. RIN eligibility should limit 2016 debottlenecking.”, Irwin added.
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 0% and a 46.3% success rate. Irwin has a -0.4% average return when recommending PEIX, and is ranked #2694 out of 3640 analysts.