Price target for Solazyme jumps as “first of 3 key proof points is weeks away”, says analyst

June 3, 2013 |

In California, Solazyme received a boost in its target price over at Raymond James at $12.50 per share, and a positive review from Cowen & Company analysts, in a recent round of investment meetings.

“We Believe 10-20 Customers Could Be in Commercial Revenue Next Year,” said Cowen & Co’s Rob Stone and James Medvedeff. “Prospects to quickly fill up capacity may be better than investors realize. There may be 2x the number of customers ready to commercialize vs. the 8 JDAs announced to date: ADM, AkzoNobel, Bunge, Chevron, Dow, Mitsui, Unilever, United Airlines, plus the U.S. military and SRN.

“Furthermore, there could be many more smaller off-takers to top off production. Importantly, dedicated facilities are not required; all products can be made in any of the plants. Announcements of additional relationships could provide triggers for the shares.

Expected milestones, writes Raymond James’ Pavel Molchanov, are “First, commissioning of phase 2 of the Solazyme Roquette nutrition joint venture’s Lestrem facility is expected in June with production shortly thereafter. Next, the Moema plant with Bunge in Brazil is on track for initial production in 4Q13. Finally, the Clinton, Iowa, plant with Archer Daniels Midland should start up by early 2014.”

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