Genesis Energy (GEL) is in a transition phase, with issues at deepwater facilities and soda ash production expected to improve by 2025, supported by upcoming offshore projects, RBC Capital Markets said in a note emailed Wednesday.
Genesis Energy reduced its 2024 adjusted EBITDA guidance by 10% due to production issues to between $625 million and $650 million, down from previous $680 million to $740 million, the investment firm said.
Risks to the company's outlook include damage to pipeline infrastructure, disruptions in the Gulf of Mexico, changes in soda ash pricing and refinery volatility, RBC said.
While offshore pipeline transportation and marine businesses are stable, the soda ash and sulfur services face short-term challenges, but are expected to recover by late 2024, the RBC analysts noted.
RBC maintained an outperform rating for Genesis Energy with a price target of $15.
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