CLNE - Piper Sandler prefers Clean Energy Fuels Opal Fuels in new RNG coverage

Piper Sandler launches coverage of the renewable natural gas sector, which it says is one of the fastest-growing segments in clean energy, with Overweight ratings and respective $8 and $12 price targets for Clean Energy Fuels ( NASDAQ: CLNE ) and Opal Fuels ( NASDAQ: OPAL ).

The firm sees renewable natural gas as one of the fastest growing segments in clean energy, driven by supportive regulatory incentives, attractive economics, abundant growth potential, and the ability to decarbonize a wide variety of GHG-producing industries, with a potential market size equivalent to the total natural gas market.

Clean Energy Fuels ( CLNE ) boasts strong EBITDA growth underpinned by eight projects under development, 12 additional projects in the pipeline and joint venture partnerships with BP and TotalEnergies, as well as the largest U.S. downstream distribution network, analyst Ryan Todd wrote.

Opal Fuels ( OPAL ) offers one of the group's highest EBITDA growth rates to 2025 supported by leading upstream RNG exposure and 16 high visibility projects, and vertical integration provides advantaged economics and a low volatility cash flow stream, according to Todd.

Piper initiates biodiesel producer Aemetis ( NASDAQ: AMTX ) with an Underweight rating and $3 price target, whose steep valuation discount is merited, given the high debt load, development experience, internal controls and mix of unproven businesses.

There's plenty of demand for RNG fuel, but Clean Energy Fuels ( CLNE ) "will continue to struggle to meet demand for some time," Gary Bourgeault writes in an analysis posted recently on Seeking Alpha .

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