- Shares on the retreat after rallying more than 3,000% from March lows on the combination of broader market weakness and a surprise equity offering.
- Company announces strategic shift from renewable fuels to specialty alcohols and essential ingredients after the COVID-19 pandemic caused demand for sanitizers and disinfectants to soar.
- Discussing the underwhelming terms of Monday's surprise equity offering, the company would have likely fared much better by simply selling more shares into the open market.
- Expect demand for the company's high-quality alcohol products to remain strong for the foreseeable future. Adjusted EBITDA should exceed $125 million next year.
- Buy with both hands going into the company's third quarter earnings release and conference call on November 9. At a very moderate 6x Enterprise Value/Adjusted FY2021 EBITDA ratio, the short-term price target for the shares calculates to $9.
For further details see:
Pacific Ethanol: Buy The Dip