Calumet Specialty Products (CLMT – Research Report), the Energy sector company, was revisited by a Wall Street analyst on June 13. Analyst Conor Fitzpatrick from Bank of America Securities reiterated a Buy rating on the stock and has a $20.00 price target.
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Conor Fitzpatrick’s rating is based on several positive developments for Calumet Specialty Products. The Environmental Protection Agency’s (EPA) proposed renewable volume obligations (RVO) for 2026 exceeded expectations, particularly in biomass-based diesel (BBD) demand, which is beneficial for Calumet. This increase in demand is expected to enhance Calumet’s operational advantages, as the company is well-positioned to adjust its feedstock inputs due to its proximity to domestic vegetable and waste oil supplies.
Additionally, the EPA’s stance on small refinery exemptions (SREs) suggests minimal risk to the realized demand for renewable identification numbers (RINs), further solidifying the demand outlook. These factors contribute to a higher margin on the cost curve and have led to an increase in the price objective for Calumet’s stock from $15 to $20. The improved demand certainty and potential for higher margins are reflected in a more favorable cost curve, a lower cost of capital, and an optimistic free cash flow forecast through 2035, justifying the Buy rating.