Enviva Upgrades to Buy at Citi after a sharp drop from the short report (NYSE: EVA)

Wood pellets in hand

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Enviva (NYSE:EVA) -2.4% in Friday trading, giving up early gains after Citi analysts upgraded it to Buy from neutral with a $62 price target, after shares fell 13% on Wednesday in response to short call from Blue Orca Capital.

Blue Orca tore through Enviva’s (EVA) claiming to be a pure ESG company is “meaningless in every way,” but Citi’s Ryan Levine said his team has “taken a closer look at the bearish arguments and believes the stock has overreacted.” to the negative.”

Levine said in meetings with Enviva (EVA) management over the years, “they have consistently shown that most but not all of its fiber supply comes from fallen trees. This concern surrounds biomass being eco-friendly. How greenhouse gases are not a new concern [and] has been sued several times over the past decade, and each time Enviva’s business model remains intact. “

Analysts note Enviva’s (EVA) converted from MLP to C-Corp “and we believe that dropping multiple stock arguments shouldn’t have any impact on business today.”

Enviva (EVA) “faces two important tests coming” – focusing on its cash conversion rate in H2 2022 and its ability to continue to access external funding from the debt market as its bond prices rise. sell-off similar to the panic of 2020 – Daniel Thurecht wrote in a analysis published on Seeking Alpha.


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