Why Enviva Shares Are Trading Lower Today

Enviva shares EVA are trading lower on Tuesday after multiple analysts lowered their price targets on the stock following the company's Investor Day event on April 3, 2023.

The Investor Day presentation included a discussion of the preliminary trends and results from the first quarter of 2023. Based on the statements made by members of the company's management, it appears that the company's Adjusted EBITDA for the first quarter and full year of 2023 will be negatively impacted by approximately $12 million due to the Deferred Gross Margin Transactions. However, the full-year guidance included in the presentation takes this expected negative impact into account.

Management also stated that the first quarter of 2023 is expected to be the final quarter with such a negative impact, and that the Deferred Gross Margin Transactions are expected to have a positive impact on Adjusted EBITDA in 2024 and 2025, increasing Adjusted EBITDA over the remaining duration of the related purchase agreement.

Analyst changes:

• Truist Securities analyst Jordan Levy maintains Enviva with a Buy and lowers the price target from $70 to $40.
• Citigroup analyst Ryan Levine maintains Enviva with a Buy and lowers the price target from $62 to $32.

Enviva is the world's largest producer of wood pellets, a renewable alternative to coal.

EVA Price Action: Enviva has a 52-week high of $91.02 and a 52-week low of $26.34.

Enviva shares are down 7.62% at $25.57 at the time of writing, according to Benzinga Pro.