On Monday, Atlas (NYSE:ATCO) Energy Solutions Inc (NYSE:AESI) experienced a revision in its stock price target by Piper Sandler, with the new target set at $25.00, down from the previous $29.00. Despite this adjustment, the firm maintained its Overweight rating on the company's shares.
The adjustment in Atlas Energy's price target comes as Piper Sandler recalibrates its expectations based on median multiples projected for the next two to five years. The Overweight rating indicates the firm's continued positive outlook on the stock, suggesting that they expect it to outperform the average market return.
The rationale behind the revised price target involves updated financial estimates for the year 2026, taking into account an expected enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) multiple of 4.9 times.
This updated multiple is slightly higher than the previous 4.7 times multiple, based on the firm's 2025 estimates. Piper Sandler's projections include an anticipated EBITDA of $748 million and net debt of $411 million by the second quarter of 2024, with 110 million fully diluted shares in circulation.
The firm has also factored in the potential for Atlas Energy to benefit from the optimized Dune Express, which is part of the company's strategic initiatives. The Dune Express project's successful execution is noted as a critical factor for the company's future performance.
However, Piper Sandler also cautions investors about the risks associated with the stock, which include the challenges in executing the Dune Express project, the possibility of an oversupply of in-basin sand, the broader oil and gas market outlook, and the company's limited float. These factors could potentially impact Atlas Energy's stock performance in the future.
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