Vertex Energy (NASDAQ: VTNR) shares jumped surged 151% in the Wednesday trading session on account of its recently announced deal for Mobile Chemical LP Refinery acquisition. The deal is worth $75 million. The deal is held for a green signal from some regulatory approvals, after which it will be in its final leg by the end of this year. This refinery is expected to report a gross profit of more than $400 million and sales of over $3 billion beginning from 2023 onwards.
Acquisition positions VTNR as single “pure-play” clean energy independent producer in southeastern U.S.
While the acquisition is set to position the company as the single largest “pure-play” clean energy producer in Southeastern U.S., it is also a way for VTNR to usher into low-carbon alternatives of energy.
Analysts upgrade VTNR
Following its upbeat financial results for the first quarter, analyst at Stifel Nicolaus, Michael Hoffman, gave a “Buy” rating to Vertex Energy, upgrading it from “Hold.” The price target has risen from $1.50 to $2, with a 12.4% upside potential as well. The analyst is also expecting $15- $20 million baseline EBITDA. Hoffman is impressed with Vertex’s effective cost controlling measures, along with strong market demand for clean energy sources.
Overall, there is a consensus rating of “Moderate Buy,” while the average price target on VTNR is $3, indicating a potential upside of 68.5% from here.
Vertex investors are seeing fortune bestowing on them
At the end of last week, investors were seeing fortunes raining on them, with VTNR shares swelling by 339%. The top analyst, Amit Dayal of H.C. Wainwright, speculates that the shares are expected to grow triple from here. The deal is more than transformational since it is positioning Vertex Energy on a strong strategic foothold in the coming years.
Vertex is transitioning into a key source of this market, with the U.S. government pushing the growth of renewable energy and the rising global demand for cleaner energy. This deal is making Vertex “hard to ignore” in the years to follow from here.