REX - REX American Resources: Net Income May Drop And The Stock Price May Follow

2024-04-05 19:46:54 ET

Summary

• REX American Resources Corporation exceeded expectations in Q4 likely due to effective hedging, leading to a surge in the stock price to $60.
• The price of ethanol has been eroding, indicating that REX's profitability and valuation will likely decline in 2024.
• I expect EPS to be around $2.00 for REX's fiscal 2025. A 15 multiple implies a $30 valuation for this component of the business.
• Net cash and speculative future cash flows from the One Earth Carbon Capture project bring my target on the stock to $50.

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