MLV Reiterates Hold On Clean Energy Fuels In Light Of One-Year Extension Of VETC
MLV analyst Carter Driscoll reiterated a Hold rating on Clean Energy Fuels (NASDAQ:CLNE) with a $7 price target, which implies an upside of 36% from current levels.
Driscoll noted, “As expected last Friday President Obama signed the Tax Increase Prevention Act that extends the VETC by one-year, which will be retroactively applied to 2014. The VETC includes $0.50/gallon credit for certain qualified alternative fuels including compressed (CNG) and liquefied natural gas (LNG).”
The analyst continued, “Based on our estimates of the volume of diesel gallon equivalents (DGE) that CLNE sells, we forecast the impact to be an incremental $30M in revenue, which is 100% margin. As a result, we have raised our 4Q14 revenue and EPS estimates to $137.7M and S0.07 from $107.7M and ($0.26), respectively. As we stated in our report from 12/10, we believe the positive cash flow will largely be earmarked for a $150M bullet payment due in 8/16 on CLNE’s 7.5% convertible debt.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Carter Driscoll has a total average return of -9.1% and a 28.6% success rate. Driscoll has a -32.6% average return when recommending CLNE, and is ranked #3114 out of 3423 analysts.