Shares in Green Plains Inc, the US-based ethanol and renewable fuels producer, soared 10% on Thursday after analysts at UBS raised their price target on the stock. The upgrade, which cited stronger-than-expected margins and operational efficiencies, sent the company's shares to their highest level in several weeks.
UBS increased its price target from $22 to $26 per share, maintaining a 'buy' rating. The bank noted that Green Plains' focus on high-protein animal feed and carbon capture technology is beginning to pay off, with improved profitability expected in the second half of 2026. The move comes as the broader biofuel sector gains traction amid supportive US policy and rising demand for low-carbon energy.
For UK investors, the rally in Green Plains is a reminder of the volatility and opportunity in the global renewable energy space. While the company is not listed on the FTSE, its performance is closely watched by fund managers with exposure to clean energy and agricultural commodities. The stock's jump also lifted sentiment in related sectors, including ethanol producers and agricultural technology firms.
Analysts caution that the biofuel market remains sensitive to US government mandates and crop prices. However, UBS's bullish stance suggests that Green Plains' strategic shift away from pure ethanol production towards higher-value co-products is reducing its exposure to commodity price swings. The company recently reported a narrower-than-expected loss for the second quarter, with revenue exceeding forecasts.
Looking ahead, investors will focus on the company's next earnings report and any further policy developments in Washington regarding renewable fuel standards. The stock's sharp move underscores the potential for significant gains in niche energy stocks, though volatility remains a key risk.