Vertex Energy started as a buy at Oppenheimer on 'blue-sky scenario'

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Vertex Energy (NASDAQ:VTNR) +2.9% in Friday's trading after analysts at Oppenheimer initiated coverage with an Outperform rating and $18 price target, as the company enjoys a "blue-sky scenario" following its acquisition of Shell's Mobile refinery amid historically elevated crack spreads.

Crack spreads have surged to record levels since the refinery deal was completed in April, and Vertex's (VTNR) May guidance implied a simple payment of just two months, Oppenheimer's Noah Kyle said.

"While attentive to execution risk and spread compression, and seeing questions around the platform's strategic future, we anticipate a step-change in profitability to enable flexibility for Vertex's future growth," according to Kyle.

Vertex Energy (VTNR) looks undervalued at 3x estimated 2023 free cash flows, Michael Wiggins de Oliveira writes in a bullish analysis published recently on Seeking Alpha.

Comments

[bike 05673]

The potential is not hidden it is about time Oppenheimer spoke out, wall street researchers write up thousands of companies with all kinds of speculative opportunities but for some reason, they seem to be very slow in covering VTNR . Hard to understand, wondering if some of the more experienced investors could explain this situation?

[qwerty11]

This stock is overvalued by a factor of 3, how can they do this?

[Uncle PennyBags]

@qwerty11 You mean undervalued by more than 3x

[JackCr]

Correct!

[bazooooka]

@JackCr what's your thoughts on crack spreads staying elevated; and if they fall back to historical norms where would you value this one at?

[JackCr]

@bazooooka
Not an expert, but it is my understanding that those spreads will not be declining significantly any time soon.......