The stock of alt-fuel specialist Clean Energy Fuels (CLNE +0.62%) was sputtering over the past few days, due in no small part to an analyst’s price target cut. Over the course of the trading week, the company’s shares fell by almost 12%, according to data compiled by S&P Global Market Intelligence.
An energetic reduction
The person wielding the scissors was Pavel Molchanov of Raymond James (RJF +1.65%). On Tuesday, he lowered his Clean Energy Fuels price target to $2.50 per share from $4. Despite that rather deep cut, Molchanov reiterated his strong buy recommendation on the stock.
Image source: Getty Images.
According to reports, a key reason for the analyst’s move was the company’s recently reported second-quarter results. Although Clean Energy Fuels beat the consensus prognosticator estimate for revenue and essentially matched the collective profitability expectation, it posted an adjusted net loss.
Much of Molchanov’s take was quite positive. He wrote that natural gas fuels are primed for solid growth, particularly in the current environment of elevated crude oil prices. He also waxed bullish on the company’s determined diversification efforts.
Today’s Change
(0.62%) $0.01
Current Price
$1.62
Key Data Points
Market Cap
Day’s Range
$1.58 – $1.65
52wk Range
$1.54 – $3.11
Volume
1.4M
Avg Vol
1.8M
Gross Margin
16.70%
Inexpensive and attractive
Clean Energy Fuels is cheap on both a price and valuation basis, particularly after this week’s sell-off. Meanwhile, I think alt-fuels are not only a good play on the current situation with crude, but they’re also a potentially lucrative long-term bet in a world that’s generally determined to produce energy more cleanly. This stock is definitely worth a look these days.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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