(Brookings, S.D.)– An analyst downgraded Brookings, South Dakota-based Verasun Energy today (Thursday), saying the ethanol producer will likely face margin pressure for the foreseeable future.
Piper Jaffray analyst Michael E. Cox cut his rating to “sell” from “neutral” and his price target to $2 from $4.75.
The new target implies he expects shares to fall about 51 percent from Wednesday’s closing price of $4.06.
Prices for corn have jumped in recent months due in part to energy demand and recent midwest flooding.
Shares of Verasun have dropped 73 percent so far this year.
A company representative wasn’t immediately available for comment.
Verasun shares lost six cents to four dollars in premarket trading.
Verasun has delayed start-ups at three of its new plants, including ones in Hartley and Welcome, Minnesota.
(Story from the Associated Press.).
