Hut 8 (HUT – Research Report), the Financial sector company, was revisited by a Wall Street analyst today. Analyst Mark Palmer from Benchmark Co. maintained a Buy rating on the stock and has a $33.00 price target.
Mark Palmer’s rating is based on Hut 8’s strategic transaction with American Data Centers, which has been transformed into American Bitcoin. This move allows Hut 8 to generate consistent, fiat-based revenue while reducing its overall cost of capital, leading to a higher valuation multiple for its stock. By repositioning itself as a low-volatility energy and digital infrastructure firm, Hut 8 can maintain exposure to bitcoin’s price without the need to allocate capital to more cyclical and higher-cost segments.
Furthermore, the transaction aligns Hut 8 with its cost of capital, making it more financeable and positioning it for lower capital costs. The company’s management aims to have American Bitcoin become publicly traded, enhancing its capital access and flexibility, which in turn creates value for Hut 8. Additionally, Hut 8 plans to strategically use its bitcoin holdings to fund energy infrastructure development, further supporting its integrated energy and digital infrastructure strategy. These factors contribute to Palmer’s view that Hut 8’s shares are undervalued, with significant upside potential.
In another report released yesterday, KBW also maintained a Buy rating on the stock with a $30.00 price target.