Stephens announced an upgrade of Green Plains Renewable Energy (GPRE) from Equal Weight to Overweight and raised its price target to $17, up from $10. The firm said the new valuation is consistent with an external fair-value assessment and argues the stock may be modestly undervalued relative to that benchmark.
The upgrade rests on Stephens' view that Green Plains is delivering a persistent earnings inflection driven by opportunities tied to 45Z. The research note highlighted that carbon capture rates are running toward 90% across the company's Nebraska operations, with monetization efforts already underway.
Stephens frames these developments as the foundation for a meaningful and sustainable step-change in earnings that could continue for multiple years. To support its valuation, the firm applied a 7.5x EV/EBITDA multiple to next-twelve-month EBITDA estimates of $186 million, producing the new $17 price target.
Market data cited in the analysis shows Green Plains currently trading at a high EV/EBITDA multiple of 88.32 on a trailing basis, even as analysts forecast the company will be profitable this fiscal year with an expected EPS of $0.22 for fiscal 2026. Stephens emphasized that the contrast between historical multiples and forward-looking profitability underscores the transformational case it sees in the company.
Operationally, Stephens attributed renewed momentum to Green Plains' leadership team, which the firm said has prioritized execution to optimize the platform for 45Z-related earnings. Management is reportedly identifying $5 million to $10 million of carbon-intensity and debottlenecking investments in Nebraska alone and has already unlocked additional capacity through process improvements.
Based on these factors, Stephens concluded that current market pricing underestimates both the magnitude and the likely persistence of Green Plains' earnings improvement, creating an attractive risk-reward profile in its view. Supporting that view, market figures show the stock returned 109.85% over the past year and 41.33% year-to-date, and it is trading in the vicinity of its 52-week high of $14.26. The research note also noted that two analysts recently revised earnings expectations upward.
Separately, Green Plains reported fourth-quarter 2025 results that included EPS of $0.17, well above an expected $0.02. Revenue for the quarter was $428.8 million, below consensus expectations of $479.73 million and representing a 26.6% decline from the prior year. Fourth-quarter adjusted EBITDA came in at $49 million, ahead of the $35 million consensus estimate, with the firm attributing the improvement to stronger ethanol performance, hedging benefits and $28 million of 45Z tax credits.
Following the quarterly results, BMO Capital raised its price target for Green Plains to $14.00 from $12.00 and maintained a Market Perform rating. These moves reflect recent activity around the company as investors and analysts reassess earnings power in light of 45Z-related cash flows and operational gains.
The combination of upgraded research coverage, management-driven operational changes and quarterly results that beat EPS and EBITDA expectations but showed revenue pressures frames the current debate over Green Plains' valuation and the sustainability of its earnings trajectory.
Key points
- Stephens upgraded GPRE to Overweight and raised its target to $17, applying a 7.5x EV/EBITDA to $186 million of next-twelve-month EBITDA.
- Carbon capture on Green Plains' Nebraska platform is approaching 90% with monetization underway, and management is identifying $5-$10 million of targeted investments to improve carbon intensity and debottleneck operations.
- Recent quarter showed EPS of $0.17 versus an expected $0.02 and EBITDA of $49 million, above a $35 million consensus, while revenue fell 26.6% year-over-year to $428.8 million.
Risks and uncertainties
- Valuation volatility - the company is trading at a very high trailing EV/EBITDA multiple (88.32), which highlights sensitivity to shifts in market sentiment in the renewable fuels and energy sectors.
- Top-line pressure - fourth-quarter revenue declined 26.6% year-over-year, indicating exposure to demand, pricing or volume risks that affect ethanol producers and agricultural markets.
- Dependence on 45Z monetization - a substantial portion of the bullish case rests on realizing value from 45Z credits and related investments; delays or changes in monetization could affect the expected earnings longevity and cash flows.