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Ethanol Producers Ahead Of The Bell
By Mr Ethanol | November 13, 2007
CNNMoney:
A Lehman Brothers analyst downgraded ethanol producers Monday, saying demand from new markets will not keep up with supply, and reduced her ratings on VeraSun Energy Corp. and Aventine Renewable Energy Holdings Inc. due to their price.
Mansi Singhal said corn prices will stay high, and could go up if fewer acres of corn are planted next year. She wrote that shares of ethanol producers will stay around their current prices over the next two or three quarters, and downgraded the sector to “Neutral” from “Positive.”
Ethanol production capacity will increase early next year, she added, and the price of gasoline will come down. Both of those factors will reduce ethanol prices.
Singhal downgraded Aventine and VeraSun shares to “Equal-weight” from “Overweight,” as both stocks have rebounded from annual lows last month.
“Since the low point of the shares on Oct. 3, both Aventine and VeraSun have bounced back, outperforming the market by 33 percent and 18 percent respectively,” she said.
Aventine shares rose 32 cents, or 3.1 percent, to $10.60 in premarket electronic trading. Shares finished at $10.28 Friday, and VeraSun shares fell 42 cents, or 3.3 percent, to $12.33.
Singhal has a $13 price target on both stocks.
Topics: Ethanol, Market, News |
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