Vertex Energy, Inc. (NASDAQ:VTNR) rose Tuesday, on continued momentum after the company announced it will acquire an Alabama refinery and related logistics assets for $75 million.
The purchase of the refinery marks the "largest, most significant transaction ever completed by Vertex, one that positions us to become a leading regional supplier of both renewable and conventional products," according to comments by CEO Benjamin Cowart in the deal announcement.
The company noted that upon completing an $85-million conversion of the facility's hydrocracking unit by the end of next year to produce renewable diesel, the refinery could generate $3 billion in revenue and $400 million in gross profit in 2023.
HC Wainwright analyst Amit Dayal awarded Vertex a Street-high $25.00 price target citing the "transformational" refinery deal. Dayal jacks up his 2023 revenue outlook to $2.9 billion from his previous estimate of $246 million, and adjusted EBITDA to $319.7 million from $25.5 million, positioning Vertex for a potential 10x-plus improvement in adjusted EBITDA in 24 months.
The analyst also forecasts 2022 revenues of $2.2 billion, adjusted EBITDA of $158.6 million and EPS $1.37, compared to $281.5 million in revenues, $12.2 million in EBITDA and a $0.09 loss per share in 2021.Vertex Energy is like "the little engine that could," Jenks Jumps wrote a month ago in a bullish analysis published on Seeking Alpha.
VTNR shares leaped $1.39, or 17.8%, to $9.20.
