Green Plains ( NASDAQ: GPRE ) -4.4% in Monday's trading after Bank of America downgraded shares to Neutral from Buy with a $43 price target following the stock's 42% one-month rally.
The stock now trades at ~8x estimated 2023 EBITDA, which BofA's Steve Byrne believes is "appropriate given the favorable MSC outlook balanced by uncertain longer-term ethanol margins."
Even with the downgrade, BofA said Green Plains' ( GPRE ) capital investment into its Maximized Stillage Co-products technology should significantly increase margins over the next few years, and increased corn oil yields also will benefit from high pricing among rising demand growth for renewable diesel.
Green Plains ( GPRE ) recently reported much better than expected Q2 earnings as revenues topped $1B and a "historic" average production utilization rate at 96.9% of capacity .
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Green Plains cut at BofA after big run-up but constructive longer term