Kevin Stanley
Long/short equity, event-driven, research analyst, CFA

Green Plains: Q4 2013 Upside Materialized, More Likely Ahead

Executive Summary

Following better than expected 4Q13 results, (as we alluded to here) Green Plains (NASDAQ:GPRE) is now positioned to accelerate earnings growth in the years ahead. This should translate into a higher share price as investors fully grasp the company's ethanol earnings potential over time. Although the stock appreciated substantially in 2013 and into 2014, we see the potential for a $30-$40 stock price using reasonable valuation multiples, implying as much as 71% upside from the current share price.

Strong 4Q13 Results

Green Plains reported better than expected 4Q13 results, the result of a combination of leverage associated with recently acquired ethanol assets and a strong ethanol EBITDA/gallon of $0.24, up nearly 50% versus a relatively...

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