Roth Capital Cuts Price Target for Clean Diesel Technologies, Inc. as Balance Sheet Remains an Overhang
In a research report published today, Roth Capital analyst Matt Koranda reiterated a Buy rating on shares of Clean Diesel Technologies, Inc. (NASDAQ:CDTI), while reducing the price target to $2.40 (from $2.50) to reflect a near-term overhang on the stock. The new price target implies an upside of 42% from current levels.
Koranda commented, “We see good fundamental progress across both CDTI’s business segments. In HDD, the incremental distribution agreements (private label in North America, Diesel Emissions Service in Australia) that the company recently announced give us additional confidence in management’s $5mn revenue projection from DuraFit. We are encouraged by the potential for CDTI to demonstrate commercial success in its powderto-coat business model with AP Exhaust (management expects H2’15 revenue contribution selling its next-generation catalysts in powder form to AP Exhaust, to be incorporated into certain aftermarket catalytic converter product lines).”
However, “We are projecting a cash shortfall in early-2016, even giving credit for strong working capital management and CDTI’s recent equity capital raise ($4.5mn in net proceeds for the issuance of 2.5mn units — one share plus 0.2 warrants at $2.65). We believe this will present a nearterm overhang on CDTI stock. We are maintaining our Buy rating on CDTI based on the long-term, disruptive potential for its catalyst technology.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matt Koranda has a total average return of 0.3% and a 41.8% success rate. Koranda has a -31.0% average return when recommending CDTI, and is ranked #2406 out of 3737 analysts.