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Bear Of The Day: Enviva Partners (EVA)

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Enviva Partners (EVA - Free Report) is a Zacks Rank #5 (Strong Sell) following a significant miss of the Zacks Consensus Estiamte for the March 2019 quarter.  Following that miss, estimates have dropped and that pushed the stock down to a Zacks Rank #5 (Strong Sell) but a recent upgrade has some investors wondering if they should buy the dip.

Description

Enviva Partners, LP is a master limited partnership which owns and operates wood pellet production plants. It serves primarily in the United States and Europe. Enviva Partners, LP is based in Bethesa, United States.

Recent Earnings

The Zacks site shows that EVA reported a loss of 39 cents when the consensus was calling for a gain of 15 cents.  That 54 cent miss translates to a negative earnings surprise of 360%.  

A miss like that is bound to move numbers for the whole year, and those estimates carry a bigger weighting on the Zacks Rank.

Estimate Revisions

The miss looks like it has extended into this quarter and the next as well. I seen the Zacks Consensus Estimate falling from 44 cents to 12 cents following the recent miss.  The following quarter was moved to 27 cents from 46 cents.

The big move came in the full year numbers, which were as high as $1.71 90 days ago, then down to $0.96 60 days ago and now at $0.52.

The 2020 numbers, however have held still at $1.33.

Upgrade

On June 24 Goldman upgraded the stock to Buy from Neutral.  They also raised the target price on the stock to $37.

This is an opportunity to buy the dip... if you believe that the weakness in the EPS will end in the coming quarters.  If the weakness persists, then the stock is likely to keep dropping.

Chart

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