UPDATE: Wunderlich Securities Initiates Coverage on Heritage Crystal-Clear with Hold Rating, $16 PT on Used Oil Opportunity

In a report published Wednesday, Wunderlich Securities analyst Michael E. Hoffman initiated coverage on Heritage-Crystal Clean HCCI with a Hold rating and $16.00 price target. In the report, Hoffman noted, “We are initiating coverage of Heritage-Crystal Clean, Inc. (HCCI) with a Hold rating and a $16 price target. The opportunity in Used Oil is evolving in a manner that is very favorable to re-refining operators. HCCI is within a few quarters of operating its Indiana plant at full capacity of 50mm gallons of input and 30mm gallons of base lube output. Its position as the #2 provider of parts washers gives it access to a very reliable recurring revenue and cash flow stream and a natural access point for the capture of used oil. Group II base lube prices are under pressure, having actually traded below Group I, which is unusual. HCCI is fully exposed to the base lube price (it does no private label blending), hence our Hold rating.” Heritage-Crystal Clean closed on Tuesday at $15.34.