It’s time to buy Chart Industries as the clean energy play gathers momentum, Stifel said. Analyst Benjamin Nolan has a buy rating on the maker of cryogenic equipment for hydrogen and other industrial gases. His $224 price target implies 68% upside from Wednesday’s close of $132.91 per share. Chart Industries shares are already higher by 15% this year. “We believe if the company can reduce leverage, extract Howden synergies, and grow revenue/EBITDA in line with guidance, we expect GTLS share price could effectively double or more as reflected in our target price,” Nolan wrote in a Wednesday note. This comes after Stifel hosted Chart Industries’ CEO Jill Evanko at its own conference. GTLS 1D mountain Chart Industries shares 1-day Those bullish comments are partly driven by Chart Industries’ recent acquisition of Howden , a maker of air and gas products, earlier this year. Chart was expected to realize $175 million in cost savings and $150 million in commercial ordering synergies within the first year of the acquisition, according to the note. Instead, it reached $73.8 million in cost savings and $33.6 million in commercial ordering synergies within the first three months. “As we move into the second half of the year, there should be an acceleration of cost synergies as further opportunities are identified,” Nolan wrote. “The company believes there is a meaningful amount of further upside for synergy orders which has been extremely broad-based so far and opened the doors to new customers.” In fact, the company sees about $800 million in revenue opportunity, compared to the $150 million originally anticipated. “With a 40% capture rate, which they expect, this potentially presents $320 million for the next 12 months,” Nolan wrote. Additionally, Chart Industries should benefit from strong and growing demand, especially as the government ramps up spending in clean energy technology. “While the company has not yet increased guidance, they did indicate that virtually every aspect of the business is going better than they had guided, and importantly consensus EBITDA is 15% below guidance with no estimate above guidance, so we believe there is potential for meaningful upside surprise should the current momentum hold,” Nolan said. —CNBC’s Michael Bloom contributed to this report.
