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OPAL: New Landfill RNG Projects Will Drive Long-Term Margin Expansion

Clean Energy Transition And Waste Valorization Will Transform RNG Adoption

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OPAL
AnalystHighTarget
Not Invested
Published 14 May 2025

Update shared on 12 Dec 2025

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AnalystHighTarget's Fair Value
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1Y
-24.6%
7D
-1.1%

Analysts have raised their price target on OPAL Fuels from 5.00 dollars to 5.50 dollars per share, citing a lower perceived risk profile from a reduced discount rate, improved long term profit margin expectations, and a more conservative view on revenue growth and future valuation multiples.

What's in the News

  • OPAL Fuels, together with South Jersey Industries and the Atlantic County Utilities Authority, brought a new RNG facility in Egg Harbor Township, New Jersey, into commercial operation, converting landfill gas into renewable natural gas for transportation and utility markets (Key Developments)
  • The Egg Harbor Township facility, located at ACUA's solid waste landfill, has a nameplate capacity of 2,500 SCFM of landfill gas and is expected to produce more than 650,000 MMBtu, or over 4.6 million gasoline gallon equivalent per year of RNG (Key Developments)
  • The project is the first to deliver RNG into the South Jersey Gas pipeline system and marks the inaugural collaboration under the 50/50 joint venture between OPAL Fuels and South Jersey Industries to develop, construct, own, and operate RNG facilities (Key Developments)
  • A second joint venture project, the anticipated Burlington RNG Facility in Florence Township, New Jersey, is in the pipeline as the next collaboration between OPAL Fuels and South Jersey Industries (Key Developments)
  • A ribbon cutting ceremony for the Egg Harbor Township RNG facility is planned for October 2025, with a detailed media advisory to be issued closer to the event (Key Developments)

Valuation Changes

  • Fair Value: Unchanged at 5.0 dollars per share, indicating no revision to the intrinsic value estimate.
  • Discount Rate: Fell moderately from 8.34 percent to approximately 7.49 percent, reflecting a lower perceived risk profile.
  • Revenue Growth: Reduced slightly from about 20.73 percent to roughly 17.77 percent, signaling more conservative growth expectations.
  • Net Profit Margin: Increased modestly from around 3.35 percent to about 4.17 percent, suggesting improved long term profitability assumptions.
  • Future P/E: Dropped sharply from roughly 59.9x to about 8.3x, indicating a substantially more conservative view on future valuation multiples.

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