Danimer Scientific (DNMR – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst today. Analyst Laurence Alexander from Jefferies remains neutral on the stock and has a $1.60 price target.
Laurence Alexander has given his Buy rating due to a combination of factors surrounding Danimer Scientific’s future growth prospects and financial forecasts. The anticipated Department of Energy (DOE) loan decision, expected in the first half of 2024, is seen as a pivotal moment for the company. Alexander’s outlook suggests that securing this loan would not only facilitate the scaling up of Danimer’s Bainbridge facility but also move the company’s focus from reaching breakeven to expanding their production capabilities. This potential influx of funds could significantly reduce additional funding needs while propelling the company towards achieving economies of scale.
In addition, Alexander’s analysis acknowledges the challenging macroeconomic environment but adjusts the model to account for a conservative base case scenario. This scenario takes into consideration a slower production ramp at the Kentucky plant and a disciplined approach to managing expenses and capital expenditures. His forecasts estimate a steady growth in adjusted EBITDA, reaching a substantial amount by the years 2028 to 2030. Furthermore, Alexander factors in other potential catalysts such as reaching breakeven at lower capacity utilization rates, progress with the commercialization of Rinnovo products, anticipated brand announcements following the DOE loan guarantee, and the potential entry into the sizeable market for paper cup coatings. These elements collectively provide a strong case for the Buy rating on Danimer Scientific’s stock.
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Danimer Scientific (DNMR) Company Description:
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