Green Plains rated Buy at Jefferies, seeing likely H2 rebound for ethanol margins

Green Plains (NASDAQ:GPRE) gets a Buy rating and a $28 price target from Jefferies, which says it expects to see profitability return for ethanol producers over the rest of this year, given expected North American corn yields and lower Corn and natural gas prices.

Green Plains (GPRE) is shifting its business model from producing ethanol, low-concentrate proteins and CO2 as a waste gas to one that arbitrages ethanol and sugar production, produces higher-margin high-concentrate proteins and low-carbon corn oil, and monetizes CO2 through carbon sequestration projects, says analyst Lawrence Alexander of Jefferies.

“The outlook for US ethanol is likely to remain positive as margins continue to rise due to higher export demand as well as shrinking US production,” Alexander added.

Green Plains (GPRE) Stock -7.1% Crude oil prices fell on Tuesday to their lowest levels since the beginning of the year, amid signs of a deal to resolve the conflict that has halted Libyan production and exports.