What happened
Shares of Renewable Energy Group (REGI +0.00%) rocketed more than 13% by 11 a.m. EDT on Tuesday. Analysts helped fuel the renewable energy stock by initiating coverage on the company.
So what
Analysts at both Credit Suisse and Truist initiated coverage on Renewable Energy Group today. Credit Suisse started the company with an outperform rating while setting its price target at $51 per share (which implies 35% more upside even after today's rally). Fueling that bullish sentiment is the bank's view that the pure-play biodiesel and renewable diesel producer is in a unique position to benefit as the economy increasingly demands less carbon-intense fuel sources.
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Meanwhile, Truist also initiated coverage on the biodiesel and renewable diesel producer. The bank rated the stock a buy, based on a similar view of its upside potential as the global economy moves away from dirtier fossil fuels toward cleaner energy sources.
Now what
Renewable Energy Group's clean fuel products are benefiting from a combination of government incentives and a demand shift toward cleaner energy. Those trends enabled the company to report stronger-than-expected earnings last month. That earnings upside appears poised to continue thanks to those dual tailwinds. That makes it an intriguing energy stock for investors looking for ways to play the pivot away from fossil fuel sources.
