Analyst Poe Fratt believes there is a huge opening in the market for the company's sustainable fuels. In particular, he noted a recent deal made with three dairies, which agreed to provide manure that Gevo will turn into natural gas.
Fratt also had positive things to say about the company's development of low carbon ethanol.
“There is a clear fairway to producing ethanol with a lower carbon footprint and shifting toward renewable transportation fuels with lower carbon footprints,” Noble wrote.
Gevo stock jumped 4.1% to $2.18 on Thursday.
On the transportation front, Gevo has been making deals to supply its sustainable aviation fuel to the airline industry. In December, the company inked a deal with Delta Air Lines Inc (NYSE:DAL) to supply 10 million gallons per year.
With the Delta deal under its belt, Gevo’s total contract profile sits at 17 million gallons. As that continues to expand, Noble wrote, the company should be able to move forward with project financing proposals.
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