$2 or higher gas - Can ethanol make a comeback? Message Board

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Non-Tech : $2 or higher gas - Can ethanol make a comeback?

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Dec 22 3:59 PM EST

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From: Sam Citron	6/29/2008 12:02:42 PM
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Goldman Sachs Pans Ethanol (AVR, PEIX, VSE) 6/27/08 24/7 Wall St. In coverage this morning, Goldman Sachs has come out and reiterated the firm's Cautious analyst coverage view for the corn-based ethanol producers. Specifically, the firm has reiterated its "SELL" ratings on: * Aventine Renewable Energy (NYSE: AVR), * Pacific Ethanol NASDAQ: PEIX), * and VeraSun Energy (NYSE: VSE). The firm notes that corn markets are already short of supply already tight and that spot prices are now much higher because of the Midwest flooding. It also noted that the next big ramp-up in ethanol capacity will keep pressure on ethanol equities. As part of this call, Goldman Sachs made wider loss projections for PEIX in 2008 and 2009 and now sees losses rather than gains in VSE as well. The interesting part of the call besides the reiterated Sell rating is that Goldman Sachs actually now sees a gain in AVR and less of an earnings drop-off in 2009 as a result of likely decelerated plant expansion plans. Jon C. Ogg June 27, 2008 Subscribe to this feed 247wallst.com

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