Calumet Renewables Expansion Is Unlocking Value: Analyst

BofA Securities analyst Conor Fitzpatrick initiated sum connected Calumet, Inc (NASDAQ:CLMT) with a Buy standing and a terms forecast of $15.

The expert noted that Calumet’s Montana Renewables portion is advancing its MaxSAF task to boost sustainable aviation substance output from ~40 cardinal to implicit 250 cardinal gallons annually, aiming to pat into stronger pricing and subsidy benefits implicit renewable diesel and petroleum.

According to Fitzpatrick, the enlargement is expected to astir treble EBITDA from 2025 to 2027 and is supported by interest-free DOE loans, reducing execution risk.

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Management plans to monetize the plus to chopped debt, which could bring genitor leverage beneath 2.5x done deconsolidation and repayment.

The expert pointed retired that Calumet underperformed during the ramp-up of its biofuels unit, Montana Renewables, owed to borderline pressure, but caller developments whitethorn displacement momentum.

Reports suggest that the Environmental Protection Agency is preparing to summation request for Renewable Identification Numbers, oregon RINs, opening successful 2026, pursuing lobbying from lipid and cultivation interests. Meanwhile, California is successful the process of re-approving measures to boost request for Low Carbon Fuel Standard, oregon LCFS credits.

Prices for RINs person astir doubled since December 2024, and the expert expects them to stay wrong a favorable range, with immoderate upside imaginable arsenic regulatory developments advance.

A betterment successful request for LCFS credits is besides anticipated, which would enactment higher margins.

For the concern thesis to materialize, the expert notes that the institution indispensable show borderline betterment successful fiscal performance, execute meaningful measurement maturation astatine MRL, and marque tangible advancement toward monetizing MRL and reducing wide leverage.

Price Action: CLMT shares are trading higher by 5.84% to $13.89 astatine the past cheque connected Tuesday.

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