Genesis Energy (GEL – Research Report), the Energy sector company, was revisited by a Wall Street analyst today. Analyst Michael Blum from Wells Fargo upgraded the rating on the stock to a Buy and gave it a $18.00 price target.
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Michael Blum has given his Buy rating due to a combination of factors that highlight Genesis Energy’s promising financial outlook. The company is expected to experience significant EBITDA growth, with projections indicating an increase from approximately $460 million in 2024 to $674 million in 2026. This growth is largely driven by increased offshore volumes, requiring minimal additional capital expenditure.
Furthermore, Genesis Energy boasts a robust free cash flow yield, projected at around 19% in 2026, which is notably higher than the median for the midstream sector. This high yield suggests potential for stock price appreciation, especially if the yield compresses to align with industry peers. Additionally, the company’s strategic use of cash proceeds to reduce debt and improve financial flexibility further supports the Buy rating, as it positions Genesis Energy for sustainable growth and potential distribution increases in the future.