While Ameresco Inc.’s (NYSE:AMRC) shares are down due to the disappointing BBB legislative and rates, as well as leverage factors and concerns around its delayed Analyst Day, according to BofA Securities the company offers “superior EBITDA growth (high-teens)” and the potential of a positive reset of long-term estimates.
The Ameresco Analyst: Julien Dumoulin-Smith upgraded the rating for Ameresco from Neutral to Buy, while reducing the price target from $88 to $61.
The Ameresco Thesis: The company’s core RNG-led growth strategy remains on track, with a slight improvement in D3 pricing, Dumoulin-Smith said in the upgrade note.
There should be “further angles for growth announced at the Analyst day, emphasizing recent wins in storage in ’22,” the analyst said. “SCE could see further expansion in ’23,” he added.
“The latest market volatility leads us to take a more conservative valuation approach, particularly with recent renewable declines. We not only reduce our baseline multiples across peers, we also substantively haircut the relative discounts ascribed to AMRC segments too vs these peers,” Dumoulin-Smith wrote to explain the price target reduction.
AMRC Price Action: Shares of Ameresco are down 0.54% to $49.73 at the time of publication Wednesday.
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