STIFEL GAVE REASONS for their rating. My comments
1. they questioned sales Q3 and Q4 sales volume. a) REGI was the only big dog around. DAR was running downgraded, SYNM out AND EIA gov data showed increased production! Plus the industry will be running flat out for 4Q just to capture the tax credits in 2013!
2. Second they commented on 2014 Volume to be set by EPA. One should note that one of the possible path ( and I say probable path) the EPA might take is to increase the Advanced Biofuel target to compensate for the lack of Cellulosic capacity. Even without a 2014-2015 tax credit, this EPA option to meet its RFS2 target will keep the Corn target as-is AND raise the Adv Biofuel RINs value. Higher sales volume and higher RINs value will compensate for no-tax-credit.
REGI results 3Q results most likely exceeded due to DAR and SYNM statu above.
Wanna know what really blows? They waited for the quiet period to begin and then did this on a Friday. While the argument sounds entirely logical, it was known that every year this will be this way until they either go farther out or end the program. This was probably to let a client fund accumulate on the cheap or to pinch the funds that have been bleeding out day after day.
The stock is already below book, so how do you throw figures out there like 8.5 to 10 without predicting a huge loss? That would have gotten them in trouble.