Shares of Gevo (NASDAQ:GEVO) are flying higher by more than 25% today. Gevo operates as a renewable chemicals and “next generation” biofuels company. The company also focuses on providing renewable alternatives to petroleum-based products. Gevo has attracted attention in recent weeks in light of the Russian invasion of Ukraine. Retail investors have noticed as well. For example, message volume on Stocktwits for the GEVO stock ticker has increased by more than 42% over the past 24 hours.
So, why exactly is Gevo trading higher today?
Today, U.S. President Joe Biden announced a ban on Russian oil, natural gas and coal imports. As a result, investors are speculating that the ban may drive up demand for Gevo’s renewable products. However, Biden also cautioned oil and gas companies to not engage in “excessive price increases or padding profits or any kind of effort to exploit this situation or American consumers.” On the other hand, Russian President Vladimir Putin signed a decree today that would ban the export of all products and raw materials outside Russia until Dec. 31.
In addition, Gevo carries an extremely high short interest, which may be factoring into today’s price action. The company has a short interest as a percentage of float of 23.29%, which would take seven days to fully cover. As the stock rises, participants with a short position may capitulate and cover their positions due to margin calls.
With Biden’s announcement and Gevo’s short interest figure in mind, let’s see how Wall Street feels about GEVO stock.
Gevo Price Predictions From Wall Street
Stifel has a price target of $10. Analyst Derrick Whitfield was pleased to see Gevo sign a letter of intent (LOI) with Chevron (NYSE:CVX) recently. The LOI reflects an agreement between the two companies to “jointly invest in building and operating one or more facilities that would use inedible corn to produce sustainable aviation fuels (SAF).” Whitfield adds that the LOI is a “strong vote of confidence” for Gevo’s technological capabilities.
In addition, Citigroup analyst Prashant Rao has a price target of $5, while HC Wainwright has a price target of $18. All in all, Gevo has an average price target of $12.25 among four firms with coverage of the stock.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.