By Sam Boughedda
Renewable energy company Enviva Partners (NYSE:EVA) was upgraded to Strong Buy from Outperform, with a price target of $80 per share at Raymond James.
Analysts there told investors in a research note that bioenergy as a replacement for coal is not a difficult case to make.
"For the first time in our 16 years of writing about sustainability, we are upgrading a stock - taking Enviva from Outperform to Strong Buy - as a direct result of the market misunderstanding the ESG attributes of the business," wrote the analysts, who added that nothing in the ESG-themed upgrade is directly related to the firm's financial estimates.
Last week, Enviva shares plunged after a short report from Blue Orca Capital, with Raymond James stating that the pressure on Enviva shares caused by the report "is a textbook example of sentiment-based multiple compression."
"With approximately 50% upside to our target price, plus the healthy and growing dividend, we think that the stock’s recent dislocation provides a compelling entry point," the analysts added. "Bioenergy is an environmentally and socially beneficial replacement for coal in power generation."