In a report published Friday, Wunderlich Securities analyst Michael E. Hoffman upgraded the rating onHeritage-Crystal CleanHCCI
from Hold to Buy, and raised the price target from $16.00 to $20.00. In the report, Wunderlich Securities noted, “We raising our rating to Buy and our target to $20 on Heritage-Crystal Clean, Inc. (HCCI). HCCI has targeted a 25 million gallon capacity expansion at its Indianapolis re-refinery that should be complete in 2014. The plant thru-put is already up 10-12 million gallons with the addition of higher capacity air pollution equipment in the third period. Couple that with better lube prices and lower used oil collection costs (not necessarily lower price per gallon paid but lower collection and transportation costs) and HCCI is poised for a 2H13 upside surprise vs. the consensus outlook, particularly in the fourth period. The combination of factors means used oil should at last be profitable in the 2H13, breakeven to positive in the third period, and nicely positive in the fourth period.” Heritage-Crystal Clean closed on Thursday at $17.98.
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