Rodman & Renshaw Gives Gevo $12 Price Target, Reflects On Progress

On January 5, Gevo, Inc. GEVO completed its previously announced 1-for-20 stock split needed to maintain the common stock listing on the NASDAQ Capital Markets exchange.

Rodman & Renshaw’s Amit Dayal maintains a Buy rating on the company, while raising the price target from $4 to $12.

Updates

On Monday, Gevo provided an update of its Luverne plant, which produced 190,000 gallons of isobutanol and about 2.8 million gallons of ethanol.

“The company also announced that it has achieved production costs below the targeted $3.00–3.50 per gallon,” Dayal mentioned, while stating that currently the plant was offline due to the need to repair parts of the pollution control equipment.

The repairs are expected to be completed in Q1:17, following which the plant is expected to return to its usual production schedule.

Progress

The analyst noted that the company has steadily and consistently made progress on various fronts, such as the settlement with Butamax, announced in August 2015, sales to the marina market since September 2015, collaboration with ValvTect for marine fuel, joint development agreement with a company in South America and another in India.

In addition, Dayal noted that Gevo had made progress with its first successful commercial flights using ATJ (alcohol-to-jet), the marine fuel distribution agreement with Musket and supply for on-road vehicle applications to Buc-ee.

“We believe that the successful commercial airline flights, powered by Gevo’s isobutanol produced using non-cellulosic and cellulosic sources, should help the company secure long-term contracts for ATJ sales,” the analyst stated.

In Friday's pre-market, shares of Gevo were up 5.18 percent at $4.06.