14 Best American Energy Stocks To Buy According to Analysts

6. Calumet, Inc. (NASDAQ:CLMT)

Number of Hedge Fund Investors  in Q1 2024: 5

Average Analyst Share Price Target Upside: 74.66%

Average Analyst Share Price Target: $22.13

Calumet, Inc. (NASDAQ:CLMT) is a specialty American energy company that provides renewable petroleum products, renewable hydrogen, and other associated products. The firm has been aggressively targeting the renewable fuels market, and it has spent more than $500 million to convert its petroleum refinery into a renewable fuel refinery. This plant will produce sustainable diesel and sustainable aviation fuel, which are widely used across the transportation industry, and it provides Calumet, Inc. (NASDAQ:CLMT) with a nice competitive moat that it could seize to its advantage if the market for these fuels opens up.  However, producing renewable fuels is a capital intense industry, and Calumet, Inc. (NASDAQ:CLMT) has $1.8 billion in debt on its balance sheet along with a tight current ratio of 0.99. These can create trouble in the future, particularly if the demand for sustainable fuels fails to materialize.

As for its current and future debt plans, here’s what Calumet, Inc. (NASDAQ:CLMT)’s management had to say during the Q1 2024 earnings call:

“I don’t think that there’s any plan to add debt there and any kind of change to that capital structure will be coincidence with kind of a deal you will own. And so I wouldn’t expect anything there. I can’t give guidance to anything that we may be doing as those kind of conversations are ongoing. So be patient with us there but no expectation to take on kind of incremental debt there unless it’s related to a DOE loan, MAX SAF expansion. And then at the broader level, Calumet focused on deleveraging. And so any cash from operations will be used to pay down debt at the parent and that’s how we think about the deleveraging strategy for the consolidated group.”