No More Dividends For Enviva, Weak Operational Performance And Guidance Cut, Analyst Downgrades Stock

Truist Securities analyst Jordan Levy downgraded Enviva Inc EVA to Sell from Buy at a reduced price target of $10 (vs. $40 earlier).
The analyst is bearish on the company's weak operational performance, guidance cut, and dividend discontinuation, announced in Q1 2023 results.
The company reported sales of $269 million in Q1, missing the consensus of $294 million. Eviva discontinued quarterly dividend payments and now expects volumes of 5 million to 5.5 million MT (vs 5.5 million to 6.0 million MT) and net loss of $(186) million-$(136) million (vs. $(48) million-$(18) million earlier) in 2023.
The analys believes that EVA's transition to a C-corp from an MLP early last year is proving more expensive than expected. Also, sluggishness in capital markets and high inflation is weighing on the margins, per the analyst.
Levy reduced the estimate for 2023 adjusted EBITDA to $187 million (from $312 million) vs. consensus of $311 million and below the company's guidance of $200 million-$250 million.
The analyst also cut 2024 and 2025 adjusted EBITDA expectations by 33% and 28%, respectively.
Price Action: EVA shares are trading higher by 23.7% at $8.67 on last check Friday.

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