Green Plains downgraded at UBS on earnings risk, strategic uncertainty

UBS downgraded Green Plains (GPRE) to Neutral from Buy with a price target of $7, down from $20.50. Green Plains is a high cost ethanol operator whose margin capture lags peers, and while a number of Hi-pro plants are working and startup of the Shenandoah, Iowa, facility has commenced, there are no real tangible earnings benefits from these projects, the analyst tells investors in a research note. The firm sees significant downside to the base case EBITDA guidance, but this is reflected in the stock price, UBS contends. In addition, with recent management departures, including its CFO, SVP of Investor Relations, and CEO, there is strategic uncertainty, the firm says.