PureCycle Technologies, the Industrials sector company, was revisited by a Wall Street analyst today. Analyst James Schumm from TD Cowen downgraded the rating on the stock to a Hold and gave it a $9.00 price target.
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James Schumm has given his Hold rating due to a combination of factors, primarily revolving around the delayed materialization of orders and the anticipated postponement in PureCycle Technologies’ growth trajectory. Although Schumm acknowledges the significant potential in polypropylene circularity, he opts for a cautious stance, awaiting the company to substantiate its value proposition and achieve profitability before revisiting a more favorable rating.
PureCycle’s recent financial performance, with third-quarter revenue only slightly above the second quarter and below expectations, alongside a negative adjusted EBITDA, further supports the Hold rating. While there is notable interest in the company’s innovative dissolution technology, the lack of substantial new orders since July raises concerns. Schumm highlights the importance of these orders as they are crucial for validating the company’s product and driving revenue growth, but regulatory and market dynamics have contributed to delays.
According to TipRanks, Schumm is an analyst with an average return of -0.9% and a 35.48% success rate.