Watch List Update: Vertex Energy (VTNR)
Posted: Mon Oct 04, 2021 1:58 pm
This small-cap is VERY HIGH on my Watch List. The note below is from Stifel's Research Department this morning.
Vertex Energy, Inc. (VTNR, $5.66, Buy; Target $14.00)
VTNR: Updating the Business Transformation Outlook - Michael E. Hoffman at Stifel
We maintain our Buy rating and lower the target price to $14 on Vertex Energy (VTNR, Buy, $5.66) given the decline in credits/subsidies values and virtually no correlated price adjustment for soybean crush. We do not believe the Shell deal is at risk despite the Sept 22 news VNTR is pushing the close into 1Q22. We believe the sale of the used oil assets (UMO) to CLH is held up by an FTC second request slowing the HSR approval timing. We believe the UMO deal is not at risk given CLH has no relevant processing capacity in the Gulf Coast and even combining the used oil collection of both businesses, CLH cannot fully internalize the supply to the processing capacity being bought. For Investors owning VTNR on the transition to renewable diesel means gaining comfort about subsidies, access to feedstock and the operating cost per barrel vs the peer group.
Vertex Energy, Inc. (VTNR, $5.66, Buy; Target $14.00)
VTNR: Updating the Business Transformation Outlook - Michael E. Hoffman at Stifel
We maintain our Buy rating and lower the target price to $14 on Vertex Energy (VTNR, Buy, $5.66) given the decline in credits/subsidies values and virtually no correlated price adjustment for soybean crush. We do not believe the Shell deal is at risk despite the Sept 22 news VNTR is pushing the close into 1Q22. We believe the sale of the used oil assets (UMO) to CLH is held up by an FTC second request slowing the HSR approval timing. We believe the UMO deal is not at risk given CLH has no relevant processing capacity in the Gulf Coast and even combining the used oil collection of both businesses, CLH cannot fully internalize the supply to the processing capacity being bought. For Investors owning VTNR on the transition to renewable diesel means gaining comfort about subsidies, access to feedstock and the operating cost per barrel vs the peer group.