Stifel analysts expressed approval of JLEN Environmental Assets (LSE:JLEN)' 51% stake disposal on a portfolio of six gas-to-grid anaerobic digestion facilities to Future Biogas for £68.1 million.
"It is good to see JLEN making progress on its disposal process, and we think further sales are likely in the months ahead," said analysts.
However, Stifel raised concerns about the company's decision to focus on buybacks rather than paying down expensive revolving credit facilities (RCF).
JLEN will retain a 49% interest in the AD Portfolio, which boasts a combined generating capacity of 38MW.
The sale is expected to reduce JLEN's leverage, with Stifel anticipating a decrease in RCF debt to approximately £111 million, or 15% of net asset value.
Stifel believes the share price should react positively, although analysts expect any re-rating to be modest due to anticipated disposals.
The shares currently trade at 93p, with a retained ‘positive’ recommendation from Stifel, targeting a price of around 100p.