SP Angel believes ATOME PLC (AIM:ATOM) is on the cusp of a breakthrough, with momentum building rapidly toward a final investment decision on its flagship green fertiliser project in Paraguay.
SPA, which acts as corporate adviser to ATOME, reiterated its 'buy 'rating and 170p target price.
It said the recent developments put the company in a strong position to secure funding and begin construction at the 145MW Villeta project by the end of September.
Full-year results for 2024 showed a loss of $7.3 million, slightly better than expected. More importantly, SP Angel highlighted major progress on the $625 million project finance package and ongoing talks with Norway’s Yara International to finalise a long-term offtake agreement.
That deal, once concluded, will underpin all production from Villeta Phase 1.
Investor backing has also firmed up. Hy24, the world's largest hydrogen-focused investment platform, is lined up as a cornerstone equity partner with a potential $115m commitment.
The implied valuation of $60 million for ATOME's stake is in line with SP Angel's own estimates and gives the project additional credibility.
The broker believes Villeta stands out in a market where many green hydrogen and ammonia ventures have stalled.
Low-cost hydroelectric power from the Itaipu dam gives ATOME a structural cost advantage, while regulatory clarity and local support in Paraguay contrast with the uncertainty facing rival projects elsewhere.
The broker sees further upside from ATOME's recently launched power division and other international projects in the pipeline.
With first production from Villeta forecast in 2028 and an annual EBITDA of around $70m, SP Angel argues that current market pricing fails to reflect the company's progress or potential.
"We expect the company to deliver several near-term valuation catalysts that will de-risk the Villeta development," it wrote.
That includes closing project finance, securing the Yara offtake and reaching final investment decision, all targeted for the third quarter.
The shares were static at 56.42p.