Based out of Omaha, Green Plains Inc. (GPRE) is an agtech company that's focused on processing corn (ZCZ24) into biofuels, food ingredients, feedstock, and more. The company operates through three segments: Ethanol Production; Agribusiness and Energy Services, and Partnerships. Incorporated in 2004, the ethanol producer was formerly known as Green Plains Renewable Energy, but changed its name to Green Plains Inc. in 2014.
Valued at $878.8 million by market cap, GPRE is a component of the Russell 2000 Index (RUT) and the S&P SmallCap 600 ($IQY). Like many other small-cap clean energy names, GPRE has underperformed over the past year; the stock is down 56.2% over the last 52 weeks, and GPRE has given up 45% of its value so far in 2024.
Green Plains Reports Disappointing Quarter
Green Plains reported disappointing Q2 results in early August, with the loss of $0.38 per share coming in far wider than analysts' $0.16 per share estimate - though it marked an improvement from last year’s per-share loss of $0.89. Revenue for the quarter totaled $618.83 million, down 28% year over year, and again missing Wall Street’s $675.33 million forecast.
Ethanol production was up 7% to 208,483 gallons during the period, but GPRE's results were pressured by lower weighted average selling prices across the board on ethanol, distillers grains, and renewable corn oil.
“While the second quarter started with continued weakness, margins began to improve heading into the third quarter and we expect to return to profitability for the quarter based on current markets across our products and setting up a stronger second half of the year overall,” said Todd Becker, President and Chief Executive Officer.
GPRE cratered 12.7% the day of the earnings report, and continued sinking to new lows, bottoming out just days later at $12.77.
Since then, though, the shares have been consolidating around the $13 level, suggesting the downside pressure has tapered off - and at least one Wall Street analyst echoes the CEO's bullish view on what the second half of 2024 could bring.
Analysts' Forecast for GPRE Stock
Analysts are highly bullish on this ethanol stock, with a consensus “Strong Buy” rating and a mean price target of $26.94 - indicating an upside potential of nearly 95% from Friday's closing price.
A total of 9 analysts are covering GPRE stock, with 7 “Strong Buy” ratings and 2 “Hold” ratings.
Recently, Jefferies analyst Laurence Alexander reiterated a “Buy” rating on GPRE, with the analyst writing, "The outlook for U.S. ethanol will likely remain positive with sustained higher margins on rising export demand as well as shrinking U.S. production."
In particular, Alexander sees a return to profitability for ethanol producers through the remainder of this year, driven by North American corn crop yields and lower prices for corn and natural gas (NGV24).
The analyst also trimmed his price target for GPRE, but it's still at a fairly ambitious $28 - implying expected upside of 102.5% to Friday's closing price.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
