A series of favorable analyst recommendations over the past few months have helped fuel the current uptrend in Energy Recovery, Inc. (NASDAQ:ERII).
The stock added 7.35% yesterday and closed at $16.35 after trading 1.5 million shares.
The stock has appreciated 656.94% over the past year and is up 689.86% versus its 52-week low of $2.07.
Energy Recovery is engaged in designing, developing, and manufacturing of energy recovery devices that transform untapped energy into reusable energy from industrial fluid flows and pressure cycles. It is a global leader in pressure exchange technology.
Analysts at Iberia initiate coverage on Energy Recovery, Inc. (NASDAQ:ERII)
Iberia initiated coverage of ERII with an Outperform rating and a PT of $21 on September 26.
Evercore ISI yesterday commenced coverage of ERII with a Buy rating and a PT of $23, says TheStreet.
Mid-September, Jefferies boosted the stock from Hold to Buy and their price target hugely from $8 to $20.
Analysts are enthused by the company’s 15-year agreement with Schlumberger Limited (NYSE:SLB) which is worth $125 million in initial fee payments and covers the commercialization of ERII’s VorTeq system for hydraulic fracturing.
In addition, the stock will gain from (Jefferies) “high incremental margins, recovery in the core desalination market and… harvesting fluid pressure in high-pressure and toxic environments.”
The company’s core pressure exchange technology continues to find larger contracts, particularly in the Middle East, in water desalination projects.
ERII had cash and cash equivalents of $98.2 million as on June 30, 2016.
Energy Recovery, Inc. (NASDAQ:ERII)’s weekly chart
Technically, a reference to the weekly chart shows that the stock is captured within a solid, rising channel. At the current price of $16.35, ERII is positioned exactly at the upper channel line, and therefore a correction cannot be ruled out.
However, given the superlative long term potential of ERII it should be bought on declines.