Ameresco ( NYSE: AMRC ) +6.7% in Monday's trading after Bank of America upgraded shares to Buy from Neutral with a $73 price target, saying the degree of earnings momentum is underappreciated by the market.
BofA analyst Julien Dumoulin-Smith said Ameresco's ( AMRC ) Projects business in particular stands out with a growing pipeline as well as ongoing expansion of the average project size.
With an expected acceleration in EPC work from the Inflation Reduction Act, Dumoulin-Smith sees Ameresco ( AMRC ) as among the first companies to benefit from upward earnings revisions in the 2023-24 period - unique compared with other beneficiaries of the legislation as the company's revenues are recognized on a percentage-of-completion basis.
Dumoulin-Smith also sees potential for IRA upside at Ameresco's ( AMRC ) renewable natural gas business, as landfill RNG facilities can qualify for the investment tax credit in the event of landfill ownership.
The analyst raised estimates for FY 2023 EBITDA to $233M on higher Projects revenue and for 2024 EBITDA to $313M, both ~4% above guidance.
Ameresco ( AMRC ) recently reported Q2 adjusted earnings of $0.62/share on revenues of $577M .
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Ameresco raised to Buy at BofA as earnings momentum underappreciated