Skip to main content

Market Overview

Stifel: The Market Is Undervaluing Charah Solutions

Stifel: The Market Is Undervaluing Charah Solutions

The market is pricing in a secular decline in coal-fired and nuclear power generation, but the decline is occurring at a slower pace than investors realize — a bullish signal for Charah Solutions Inc (NYSE: CHRA), according to Stifel. 

The Analyst

Stifel's Michael Hoffman initiated coverage of Charah Solutions with a Buy rating and $15 price target.

The Thesis

In April 2018, 53 percent of the electric power in the U.S. was produced with coal and nuclear sources, but the U.S. Energy Information Administration expects that figure to drop to 43 percent in 10 years, Hoffman said in a Monday note. (See the analyst's track record here.) 

Despite the decline, Hoffman is unconcerned about the size of the market and expects the spending on nuclear outages and coal ash management to reach $50 to $60 billion and $30 to $45 billion, respectively, in the same time frame. 

Charah Solutions should capture a fair share of this market because it has a clear competitive advantage, the analyst said. The company is the only coal ash service company that covers three potential segments: day-to-day coal combustion residuals generation management, CCR byproduct sales and remediation of CCR ponds, Hoffman said. It has been doing this work for more than 20 years and has 30 years of experience in providing critical maintenance services to the nuclear power industry, with an unrivaled safety and compliance record, he said. 

Hoffman forecast fiscal 2018 free cash flow of negative $42.2 million, a number he said should improve to a positive $1.8 million in fiscal 2019 and $14.1 million 2020.  

Price Action

Charah Solutions shares were down 2.18 percent at $11.21 at the time of publication Monday. 

Related Links:

Benzinga's Top Upgrades, Downgrades For July 9, 2018

Charah Solutions, Inc. Announces Pricing of Initial Public Offering

Latest Ratings for CHRA

May 2020B of A SecuritiesReiteratesUnderperform
Oct 2019Morgan StanleyMaintainsEqual-Weight
Aug 2019Morgan StanleyDowngradesOverweightEqual-Weight

View More Analyst Ratings for CHRA
View the Latest Analyst Ratings


Related Articles (CHRA)

View Comments and Join the Discussion!

Posted-In: coal energy Michael Hoffman powerAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga

Latest Ratings

SCYXAegis CapitalMaintains40.0
ARGOBoenning & ScattergoodDowngrades
TLSAZacks Investment ResearchInitiates Coverage On7.5
TOTJP MorganUpgrades
WSOMorgan StanleyMaintains244.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at