Opal Fuels initiated with a Sell at Goldman Sachs

Goldman Sachs analyst Adam Bubes initiated coverage of Opal Fuels with a Sell rating and $5.80 price target. The company’s core value add, retail distribution of gas, has higher capital requirements and drives lower returns versus landfill gas asset owners, the analyst tells investors in a research note. The firm also sees 22% downside to consensus 2024 and 2025 EBITDA estimates. The consensus is modeling an aggressive timeline for new projects coming online and assuming a step up in utilization inconsistent with how plants typically scale, contends Goldman.