Marrone Bio Innovations Inc (NASDAQ:MBII) (FRA:0MB) shares climbed Friday after an analyst at Canaccord Genuity upped the price target for the company to $3.50 from $2 and reiterated a Buy rating.
The company introduced a 2022 revenue projection of $7.7 million based on “a continuing shift to seed and soil treatments and plant health solutions,” with an EBITDA of $1.2 million.
Marrone shares gained 0.8% to $2.62 on Friday morning.
READ: Marrone Bio CEO confident in FY2020 revenue numbers, lays out path to diversification in shareholder letter
Analyst Bobby Burleson noted that the Marrone management team is speeding up the commercialization process and tightening its focus.
“Our positive outlook is based on new management’s embrace of a broader mandate that joins operational efficiency and accelerated commercialization efforts to the legacy of a narrower focus on technology,” Burleson wrote. “Our price target is increased to $3.50 from $2, based in large part on the roll-forward of our estimates to 2022 and strengthening conviction in solid execution on MBII’s growth and profitability plan.”
Going forward, one key catalyst for growth is the company’s Finnish nutrient and biostimulant subsidiary Pro Farm Technologies OY, the company noted.
“Our constructive view of MBII’s growth prospects hinges on the knock-on benefits of the company’s acquisition of Pro Farm, robust product development pipeline, and the June 2020 appointment of operationally focused CEO Kevin Helash,” Burleson wrote.
“With its closing in Q3 of 2019, Pro Farm expanded MBII’s product suite with bionutrients, biostimulants and seed treatment products, as well as broadened the company’s global distribution footprint and brought important exposure to row crops,” he added. “Collaborations and product introductions that have followed [the Pro Farm deal] are likely to proliferate over the next several years, with over a dozen first approvals and launches in the pipeline.
Canaccord Genuity placed strong emphasis on Helash’s leadership.
“In addition to pursuing growth, Mr. Helash is focused on bolstering profitability by rationalizing costs and driving efficiencies across the organization,” Burleson wrote. “Solid execution on MBII’s growth and profitability goals will likely occur against a backdrop of generally strengthening demand for biological crop solutions, where a scarcity of pure-plays and increasing collaboration with agrichemical majors should help to fuel investor interest.”
Based in Davis, California, Marrone Bio holds more than 400 issued and pending patents and has brought six US Environmental Protection Agency-registered biological product lines and one biostimulant to market.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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