After a 6.8% decline last week, shares of Calumet (CLMT +3.34%) are racing higher today. With an analyst taking a more bullish stance on Calumet stock, investors have been motivated to pick up shares of the renewable fuels producer.
As of 2:36 p.m. ET, Calumet stock is up 15.2%.
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Free cash flow figures prominently into this new opinion
Maintaining a buy rating, Bank of America lifted its price target on Calumet stock to $45 from $38. According to Thefly.com, the firm based its more bullish price target on the recognition that Calumet is strengthening its balance sheet through stronger free cash flow, which is helping the company to retire debt.
NASDAQ: CLMT
Key Data Points
Based on Calumet's Friday closing price of $39.48, the new Bank of America price target implies 14% upside.
Calumet generated about $54 million in free cash flow during Q2 2026. This supported the company's retiring $115 million in debt last month.
Efforts to continue strengthening the company's financial health by shoring up its balance sheet may extend into future quarters. In its Q2 2026 financial results press release, Calumet states that it "remains focused on strong operations and continued use of cash from operations to pay down debt in future periods."
What's an investor to do now?
While Bank of America's higher price target for Calumet is worth acknowledging, investors should recognize that the stock is hardly a screaming buy right now. Shares have soared 127% year-to-date as of this writing, and they're still priced at a premium to their five-year average price-to-sales multiple of 0.33, trading currently at 0.75 times sales. Fortunately for those with a hankering for a chemical stock investment, there are plenty of other choices to consider.
