Roth Capital Maintains Bullish Stance On CDTi Following Second Quarter Earnings Results


In a research report published August 11, Roth Capital analyst Matt Koranda maintained a Buy rating on Clean Diesel Technologies (CDTI) and a $3.75 price target. The report follows the company’s second quarter results, beating Koranda’s Q1 EPS expectations by driving better-than-expected GMs and controlling opex nicely. 

Koranda noted, “We are encouraged by new management’s strategy of pursuing the drop-in DPF aftermarket and we like the focus on controlling opex. We look for meaningful revenue growth from the DPF aftermarket or any potential shorter sales cycle catalyst wins as milestones for the stock in H2’14 and 2015.” The analyst added, “In our view, even a small share of the $550mn/year DPF aftermarket opportunity that management highlighted could be meaningful for CDTI. The market appears attractive, but execution will be critical on several items, in our view. Some critical factors include: (1) developing the right mix of channel partners; (2) strong inventory management to keep lead times short; and (3) ensuring the proper pricing strategy to win share from OEM and other potential aftermarket competitors. While we are encouraged by the potential for this market, we hold off on modeling meaningful revenue growth from this opportunity, for conservatism”. 

CDTI Chart

 

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