GEVO INC STOCK CHART
GEVO INC BUSINESS
With sustainable aviation fuel, renewable premium gasoline, and renewable natural gas, Gevo is commercialising the next generation of advanced, bio-based renewable fuels that have the potential to achieve zero carbon emissions over the lifecycle of the fuel. This is in response to the market need to reduce greenhouse gas emissions with sustainable alternatives.
Gevo produces its energy-dense liquid hydrocarbons using low-carbon renewable resource-based carbohydrates as a raw material and is creating renewable electricity and renewable natural gas for use in the production processes, resulting in low-carbon fuels with significantly lower carbon intensity. With significantly lower greenhouse gas emissions, our products outperform conventional fossil fuels in engines and infrastructure.
Gevo's technology not only addresses the issues with fuels but also makes it possible to produce some plastics, including polyester, using more environmentally friendly materials.
The price of oil and the benefit of reducing carbon emissions that would otherwise raise greenhouse gas emissions are two factors that will determine how well Gevo can break into the expanding low-carbon fuels market. Gevo thinks that its patented, proven technology, which enables the use of a range of low-carbon sustainable feedstocks to produce price-competitive low carbon products like jet fuel, diesel fuel, and gasoline components, has the potential to produce project and corporate returns that are sufficient to support the establishment of a multibillion dollar company.
With a focus on the Sustainable Aviation Fuel (SAF) market, which is experiencing rapid growth and high demand, Gevo manufactures drop-in hydrocarbon fuels and chemicals. SAF can be produced using carbohydrates as the renewable carbon feedstock using alcohol to jet technology, as well as de-fossilized energy for process energy requirements.
The majority of the 375 MGPY of SAF pre-sold contracts were financeable take-or-pay agreements with attractive project-level returns that are intended to facilitate project debt financing.
Gevo began construction on "Net-Zero 1" at Lake Preston, South Dakota, in September 2022. It is scheduled to go online in 2025 and produce 62 MGPY of SAF and other hydrocarbons, 475 MGPY of high-value nutritional goods, and 30 MGPY of maize oil.
By 2030, Gevo wants to be able to produce 1 billion gallons of SAF.
In Northwest Iowa, Gevo has constructed a RNG plant that sources manure from three dairies with about 20,000 cows. Production is ramping up to 355,000 MMBtu of RNG, which is sold into the California market.
Verity Tracking, a blockchain-based "track and trace" solution being developed by Gevo, measures and tracks carbon and sustainability from the farm to the jet engines.
As of June 30, 2022, the balance sheet of Gevo showed $547 million in cash, cash equivalents, restricted cash, and liquid investments.
INSTITUTIONAL INTEREST IN GEVO INC SHARES
Gevo, the energy company that has been making headlines since the beginning of this year, has recently been added to the list of stocks being purchased and sold by big investors. In the first quarter, IndexIQ Advisors LLC acquired a new stake in Gevo valued roughly $399,000.
In the first quarter, Benjamin Edwards Inc. increased its stake in Gevo by 65.2%. Benjamin Edwards Inc. has increased its stake in the energy company from 7,058 shares during the most recent quarter to 17,890 shares, valued at $84,000.
In the second quarter, Aurora Private Wealth Inc. added a fresh $35,000 position to its holdings in Gevo. In the first quarter, Swiss National Bank increased its stake in Gevo by 9.3%. After buying an additional 40,800 shares, Swiss National Bank now owns 477,300 shares of the energy business valued at $2234000.
And finally in the first quarter Mirae Asset Global Investments Co Ltd increased its stake in Gevo by 10% after completing its purchase of 151K shares at an average price of $19
GEVO INC SHARE PRICE ANALYSIS
Gevo (NASDAQ:GEVO), a provider of renewable fuels, had a phenomenal run from late 2020 to early 2021. Share prices soared from less than $1 to temporarily exceeding $15. A brief clean energy stock craze was sparked by President Joe Biden's victory.
GEVO stock is once again included in the list of penny stocks today. The president no longer prioritises clean energy. The appeal of speculative growth stocks like this one has also been diminished by shifting market conditions. Despite the fact that it was released four months ago, Citigroup analysts' "buy" rating on the stock has made the case for why it would be a desirable "high risk, high reward" type of chance.
The goal of Gevo's Net Zero concept is to produce liquid hydrocarbons using renewable energy sources including wind, renewable natural gas, and biogas, which will result in net zero greenhouse gas emissions when these fuels are used in engines.
According to Noble analyst Poe Fratt, "the potential for renewable fuels remains very high and adding strong partners are game changing events." The recent efforts to build alliances with ADM and Axens complement the additions of Chevron as a client and co-investor and Kiewit as the FEED engineer, according to the company. Each partner raises the Net Zero concept's legitimacy and credit profile.
GEVO anticipates using plants, not oil, to produce jet fuel. For the development of commercial projects including sustainable aviation fuel and ethanol-to-jet technology, Gevo, Inc. has a strategic partnership with Axens North America, Inc. It anticipates selling considerable quantities of this jet fuel once its factory is operational. However, building on the plant is still ongoing.
Gevo and Delta Air Lines (NYSE:DAL) have a contract. It agreed to provide 75 million gallons of sustainable aviation fuel (SAF) annually for seven years as part of a "take-or-pay" contract with Delta.
Additionally, Chevron (NYSE:CVX) struck an agreement earlier in the fall of 2021 to jointly invest in the construction and operation of one or more facilities that will process corn to provide sustainable aviation fuel. Additionally, Chevron would be granted the right to offtake the plant's annual 150 million gallons.
Along with the flurry of collaborations, the company's most recent capital raises have strengthened the "green fuel development strategy" and established a "financing fairway" into 2H2022.
However, the fundamental framework for GEVO stock really got a shot in the arm because of Russia’s invasion of Ukraine. In turn, the military aggression effectively shelved a significant portion of global energy supplies. And suddenly, western powers were desperately fast-tracking their clean energy infrastructure initiatives.
Nevertheless, penny stocks are never an easy category to participate in. With Gevo, you must be aware that biofuels are not a panacea—they are crop-intensive to generate enough biofuel volume. Over time though, biofuels could play a complementary role in a holistic energy portfolio. So if you have some coins under your sofa and want to invest in something that could potentially get some good traction down the road, GEVO might be one of these more interesting penny stocks that investors should consider adding to their portfolios!
GEVO INC SHARE PRICE PREDICTION
It's been a wild ride, but I'll be honest: I'm ready to put GEVO in the rearview mirror.
It's hard to predict what's going to happen next when it comes to GEVO stocks, but the trend seems clear: they're going up. And not just a little bit—they're going up like a rocket.
In fact, Citigroup has just predicted that GEVO will hit $5 by 2022! And Stifel is predicting that it will reach $10 by 2021.
But wait—there's more! Both these predictions are based on research reports from February 9th of this year. What does that mean for you? It means you have time to buy GEVO stocks before everyone else does!
Jefferies Financial Group analysts are predicting that Gevo will post earnings of $0.05 per share for the third quarter of 2022. The energy company's Q3 earnings outlook comes on the heels of a disappointing report from the Carbon Disclosure Project (CDP), which showed that Gevo's annual carbon emissions were up by 8%, and that its total emissions were up by 7% over last year.
The analyst also predicts that Gevo's full-year earnings will come in at $0.28 per share, which would be up from its previous estimate of $0.25 per share. Jefferies Financial Group also expects Gevo's full-year earnings to rise to $0.21 per share in FY2023, $0.06 in FY2024, $0.07 in FY2025, and finally $0.33 per share in FY2026—which is an increase from their previous estimate of $0.23 per share for these years as well!
According to Jefferies Financial Group’s estimates, Gevo's Q4 2022 will see it post earnings of ($0.05) per share; its Q1 2023 forecast has it earning ($0.07) per share; its Q2.
"If you buy Gevo today, you're buying into the future."
That's what Citi analyst Prashant Rao said in a note to investors today. And he wasn't kidding: the shares of Gevo have received a $5 price target from Citi. And Citi analyst Prashant Rao initiated coverage of Gevo with a “Buy” rating.
Rao noted that Gevo is within months of hitting a potential inflection point in its cash flow profile. And Rao sees the inflection coming planned growth in renewable natural gas and sustainable aviation fuel.
Plus Rao pointed out that Gevo’s Northwest Iowa RNG project is set to fully come on stream this year with the more substantial Net-Zero 1 project on course to come on stream in 2024.
Rao said that he believes Gevo will continue to grow at a rapid pace as it continues its strategy of focusing on partnerships with companies that can help it bring its products to market more quickly and efficiently. He thinks these partnerships will lead to faster growth and higher margins for Gevo, which could allow it to reach profitability sooner than many investors expect.
GEVO INC PRODUCTS
Gevo is the world's leading producer of biofuels, and we are proud to be able to do our part in helping the global food production supply chain. We have a variety of products that can help you create energy from waste and feedstock, including butanol and biodiesel. Our biojet technology allows you to convert biomass into clean diesel without using fossil fuels or chemicals. Biopropane is also available as a feedstock for producing renewable fuels such as ethanol, methanol and butanol.
isobutanol
Isobutanol is a biofuel made from corn ethanol and natural gas. It can be blended with gasoline to produce a cleaner burning fuel that contains fewer greenhouse gases than gasoline alone.
The technology for producing isobutanol has been around since the late 1800s, but it wasn't until the mid-20th century that scientists began researching ways to produce this type of fuel economically.
In recent years, there's been an increased interest in using this renewable source in place of fossil fuels like diesel or gasoline because it's non-toxic and doesn't require any refining before being used by consumers (unlike biodiesel).
diesel
Isobutanol is a gasoline substitute that has a higher octane rating than ethanol. It's used in the US and Brazil, where it's more commonly known as methanol. In China, isobutanol is known as pingtan (or "pre-treatment").
The Gevo process produces four types of hydrocarbon liquids: diesel and synthetic crude oil for use in fuel formulations; ethylene glycol (a byproduct from sugar refining), which can be used to make polyester fibers; methanol (a raw material for many industries); and butanol (an industrial solvent).
biojet
Biojet is a drop-in, renewable fuel that is used in jet engines. It's a replacement for kerosene and can be produced from corn, sugar cane or algae.
There are no emissions from biojet because it produces no carbon dioxide or pollutants when burned.
biopropane
Biopropane is a renewable alternative to propane. It can be used in the same applications as propane and has many of the same properties, such as boiling point and flashpoint, making it an ideal fuel for use in heating, cooking and refrigeration systems.
Biogasoline is made from organic waste materials – including food scraps - through anaerobic digestion (AD) technology at a biorefinery facility that processes food waste into bioethanol or biogasoline products. This process produces clean burning fuels that are carbon neutral because they come from non-food sources such as woodchips or municipal solid waste (MSW).
GEVO INC COMPETITORS
The primary competition for Gevo is with companies in the oils/energy sector, such as REX American Resources, Origin Materials, FutureFuel, Aemetis, CENAQ Energy, Riley Exploration Permian, Altus Midstream, Sprague Resources, and Natural Resource Partners.
GEVO INC BUSINESS UPDATES
Gevo reports that it has approximately 375 million gallons per year of Qi fuel supply agreements. It expects that the demand will enable multiple projects to be developed and their debt to be financed. Based on current market projections and certain assumptions, principally including shortage projections that would require significant development over the next few years, the agreements amounts to approximately $2.3 Billion in sales annually. Offtake members include: Trafigura, Kolmar, Delta Airlines, American Airlines, Alaska Airlines, Finnair, Japan Airlines, British Airways, Aer Lingus, and SAS.
Many businesses in the renewable energy sector benefit from the Inflation Reduction Act ("IRA"), which was put into law in August of this year. It also sends a good message to SAF particularly. This two-phased strategy to promote investment in the SAF sector establishes a SAF blenders tax credit for the 2023–2024 timeframe with a potential value of $1.25 per gallon. It established a Clean Fuel Production Credit ("CFPC") with a credit of $1.75 per gallon for domestically produced, net-zero carbon intensity ("CI") score SAF in the second two-year phase, 2025-2027.
Both credits are valued based on the fuel's CI score and call for a minimum 50% decrease in greenhouse gas ("GHG") emissions. Due to the anticipated low CI score of Gevo products, Gevo is anticipated to profit from such a scheme, similar to other net-zero enterprises.
Initial volumes of SAF are anticipated to be delivered in 2025 as a result of the Net-Zero 1 ("NZ1") project being on schedule following the recent groundbreaking ceremony near Lake Preston, South Dakota. A portion of the 375 MGPY of financeable SAF and hydrocarbon supply agreements that are already in place would be satisfied by the approximately 55 MGPY of SAF or 62 MGPY of total hydrocarbon quantities that NZ1 is anticipated to produce.
As phase 2 of the front-end loading work (FEL-2) has been completed, the switch from Gevo's original isobutanol-to-SAF and isooctane design to an ethanol-to-SAF design is continuing to produce increased production predictions. Project EBITDA1 for NZ1 is predicted to be in the $300–325 million range each year, a 56% increase at the midpoint from the previous projection of $200 million per year thanks to the outcomes of this work and assistance from the CFPC.
It is currently anticipated that the entire installed cost for NZ1, which includes the capital needed for the alcohol-to-jet fuel facility as well as any site development expenditures, will be over $850 million, up 33% from the previous estimate of $640 million. Steel, equipment, and supply chain costs have increased due to the inflationary environment, which is the main cause of this increase.
Gevo is still making strong progress toward securing additional SAF production sites outside of NZ1. These potential locations must have a desirable combination of features that will allow the Company to produce affordable fuels with the smallest possible carbon footprint. The Company is in preliminary feasibility and development discussions with several of them, including ADM, and is continually narrowing down Gevo's preferred list of partners and sites with decarbonization in mind.
The production of Gevo's renewable natural gas ("RNG") plant in Northwest Iowa (the "RNG Project") is increasing. The federal Renewable Fuel Standard ("RFS") has informed the company that the RNG produced is eligible for Renewable Identification Numbers ("RINs"). In the third quarter of 2022, Gevo will start recognising revenue for RNG sales; however, this initial revenue will only be for the value of the commodity, excluding environmental credits, and it will only cover a portion of the quarter.
However, due to the timing of the certification and documentation process for the Low Carbon Fuel Standard ("LCFS") credits, the full range of the available credits will start contributing to income in 2023. Some sales revenue from environmental qualities is anticipated in the fourth quarter of 2022.
Depending on a number of assumptions, including as the value of credits under the federal RFS and the LCFS in California, the RNG Project is anticipated to yield Project EBITDA1 in the range of $16-$22 million per year starting in 2023.
Comments
Post a Comment