Analyst Amit Dayal of H.C. Wainwright maintained a Buy rating on Fuel Tech (FTEK – Research Report), retaining the price target of $4.00.
Amit Dayal has given his Buy rating due to a combination of factors including Fuel Tech’s solid balance sheet and its strategic market positioning. Despite a year-over-year decline in revenue for the first quarter of 2024, the company managed to maintain a healthy gross margin and turned a profit, contrasting with the loss reported in the same quarter of the previous year. Furthermore, with no debt and a considerable cash reserve, Fuel Tech is well-positioned to leverage its financial stability for growth opportunities. The expectations of revenue growth in the latter half of the year, fueled by new customer additions and increased activity, also contribute to the positive outlook.
Additionally, Dayal’s optimism is supported by the company’s ongoing efforts to establish new customer relationships and progress in commercializing its offerings, which have the potential to enhance revenue and margins beyond 2024. Macro trends such as the increasing demand for base load power and stringent emissions regulations are seen as favorable to Fuel Tech’s future. While acknowledging risks related to execution, regulation, customer concentration, potential dilution, and the broader economic and geopolitical climate, Dayal’s Buy rating reflects a strong belief in the company’s ability to grow significantly over the next decade, as evidenced by his revenue and operating expense projections.
Dayal covers the Industrials sector, focusing on stocks such as Ceco Environmental, Fuel Tech, and Plug Power. According to TipRanks, Dayal has an average return of -14.7% and a 25.51% success rate on recommended stocks.
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Fuel Tech (FTEK) Company Description:
Fuel Tech, Inc. engages in the development, commercialization, and application of proprietary technologies for air pollution control, process optimization, combustion efficiency, and advanced engineering services. It operates through the following segments: Air Pollution Control and Fuel Chem. The Air Pollution Control segment includes technologies to reduce nitrogen oxides emissions in flue gas from boilers, incinerators, furnaces, and other stationary combustion sources. The Fuel Chem segment uses chemical processes in combination with computational fluid dynamics, and chemical kinetics modeling boiler modeling, for the control of slagging, fouling, corrosion, opacity, and other sulfur trioxide-related issues in furnaces, and boilers. The company was founded by Burr T. Walter in 1987 and is headquartered in Warrenville, IL.
