Shares of Hut 8 Corp. (HUT) are up more than 5% at the time of writing after H.C. Wainwright upgraded the Bitcoin (BTC-USD) miner from Sell to Buy. Five-star analyst Mike Colonnese pointed out several near-term catalysts that could be positive for the stock price following Hut 8’s Q2 results.
Colonnese highlighted that Hut 8 completed its restructuring and powered up a new facility in Texas, which gives it a competitive edge due to lower electricity costs. In fact, the company’s efficiency was a key area of concern among analysts. According to TipRanks’ Bulls Say, Bears Say tool pictured below, Hut 8 has one of the oldest and least efficient mining fleets. Therefore, the new facility should help the company improve in this regard.
The analyst also mentioned the company’s strong capital position–which includes 9,102 Bitcoins valued at $570.5 million–and the potential for a high-performance computing deal. Indeed, Hut 8 closed a $150 million strategic investment from Coatue to build AI infrastructure. In addition, he believes that the stock is trading at an attractive valuation, especially with shares down 40% month-over-month.
As a result, Colonnese increased his price target on Hut 8 from $7.5 to $13.5 per share. It’s worth noting that, so far, Colonnese has enjoyed a 48% success rate on his stock ratings, with an average return of 40% per rating.
Is Hut 8 a Good Stock to Buy?
Overall, analysts remain bullish on HUT stock, with a Moderate Buy consensus rating based on four Buys and one Sell. Over the past year, HUT has decreased by more than 10%, and the average HUT price target of $15.38 per share implies an upside potential of 33% from current levels.
