Last Update 24 Jan 26

GPRE: Seasonal Margin Pressure And 45Z Accounting Will Shape Future Upside

Analysts maintained their fair value estimate for Green Plains at approximately $11.56 per share, noting that the unchanged target reflects recent caution regarding seasonal crush margin pressure and concerns about less conservative 45Z accounting.

Analyst Commentary

Recent research commentary on Green Plains centers on valuation now sitting close to published targets, seasonal margin pressures and questions around the conservativeness of 45Z accounting in the latest quarter.

Bullish Takeaways

The current fair value estimate around US$11.56 per share suggests that, on paper, analysts still see some gap between recent trading levels and their view of intrinsic value.
The unchanged price target of US$10 in the latest report indicates that recent quarterly results did not trigger a cut to long term expectations for the business.
Analysts highlighting the stock as fairly valued at current levels are implicitly acknowledging that recent execution has been sufficient to support existing models, rather than forcing a reset.

Bearish Takeaways

The move from a more positive rating to a neutral stance signals that some analysts see the near term risk or reward as more balanced, which can limit the case for aggressive upside from this point.
Comments that crush margins are likely to contract seasonally into winter point to potential pressure on near term profitability, which can weigh on earnings based valuation metrics.
Concerns that 45Z accounting in Q3 is “clearly not conservative” introduce an extra layer of caution around the quality and sustainability of reported results, which can affect confidence in both cash flow and earnings projections.
With the shares described as having reached the referenced US$10 price target, some investors may see less room for rerating in the short run without clearer visibility on margins and the treatment of 45Z benefits.

What's in the News

Green Plains appointed Ann Reis as Chief Financial Officer, effective January 6, 2026, with former finance leader Phil Boggs departing on January 5, 2026. Reis brings more than 20 years of experience across agribusiness, energy, and financial services, including roles at Southwest Iowa Renewable Energy, Lincoln Financial Group, and ConAgra Foods, and holds advanced accounting qualifications. (Key Developments)
Between July 1, 2025 and November 5, 2025, Green Plains repurchased 2,900,000 shares for US$30 million, representing 4.42% of the company, completing a total of 10,296,936 shares repurchased for US$122.71 million, or 23.22% of the company, under a buyback program announced on August 14, 2014. (Key Developments)
For the third quarter of 2025, the company reported ethanol production of 197,264 gallons, distillers grains of 417 equivalent dried tons, Ultra High Protein of 71 tons, renewable corn oil of 72,345 pounds, and corn consumed of 66,601 bushels, with comparative figures for the same period in 2024 also provided. (Key Developments)
For the first nine months of 2025, Green Plains reported ethanol production of 586,163 gallons, distillers grains of 1,247 equivalent dried tons, Ultra High Protein of 205 tons, renewable corn oil of 201,839 pounds, and corn consumed of 198,177 bushels, again with prior year figures disclosed for context. (Key Developments)
On October 27, 2025, Green Plains closed a private placement of senior unsecured notes due 2030, with the 2030 notes carrying a 5.25% annual interest rate, payable semiannually on May 1 and November 1, starting May 1, 2026. (Key Developments)

Valuation Changes

Fair Value Estimate remains unchanged at about US$11.56 per share, indicating no revision to the core intrinsic value input in the model.
The Discount Rate has moved slightly from 7.28% to 7.15%, reflecting a modest adjustment to the required return used in the valuation.
Revenue Growth is effectively the same at about 14.64%, suggesting no change to top line growth assumptions in the updated analysis.
The Net Profit Margin is maintained at roughly 3.87%, indicating stable expectations for future profitability on a margin basis.
The Future P/E has been adjusted marginally from 9.26x to 9.23x, signaling a very small tweak to the earnings multiple applied to forward estimates.

Expansion of clean fuel incentives and favorable regulatory changes drive increased recurring revenues, premium pricing, and higher margins from low-carbon ethanol and coproducts.
Operational improvements and strategic diversification into high-value coproducts strengthen resilience, boost free cash flow, and enable reinvestment and deleveraging.
Dependence on supportive policies, export demand, and management execution exposes earnings and margin growth to regulatory, market, and leadership risks.

Catalysts

About Green Plains

Produces low-carbon fuels in the United States and internationally.What are the underlying business or industry changes driving this perspective?

Extension and enhancement of government incentives, specifically the confirmation and expansion of the 45Z clean fuel production tax credit through 2029 (and policies rewarding US/North American feedstock), position Green Plains to significantly increase recurring revenues and EBITDA from low-carbon ethanol production-projecting $150M+ annualized EBITDA from just three plants with all nine expected to qualify in 2026.
Industry and regulatory momentum for decarbonization-including the removal of the indirect land use change (ILUC) penalty for low-CI fuels and proliferation of clean fuel mandates-secure robust demand and premium pricing for Green Plains' products, supporting higher utilization rates and expansion of net margins through improved carbon intensity scores.
Rapid improvements in operational efficiency, plant yields, and sustained cost reductions (such as surpassing a $50M cost-saving target and targeting ongoing SG&A compression) are improving gross and net margins, with operating leverage set to amplify earnings growth as revenues from carbon capture and coproducts scale.
Successful ramp-up and diversification of high-value coproducts like ultra-high protein feed, fermentation products, and corn oil-with continued strategic process innovation and bulk export growth-are building resilience to ethanol price volatility, smoothing revenue and supporting higher blended margins.
Monetization of substantial carbon credits and asset optimization (including noncore asset sales and deleveraging) are significantly improving free cash flow and liquidity, enabling reinvestment into growth projects or further debt reduction, directly impacting free cash flow generation and long-term earnings power.

Green Plains Earnings and Revenue Growth

Green Plains Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Green Plains's revenue will grow by 12.4% annually over the next 3 years.
Analysts assume that profit margins will increase from -6.3% today to 3.4% in 3 years time.
Analysts expect earnings to reach $116.3 million (and earnings per share of $2.05) by about August 2028, up from $-151.9 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 6.8x on those 2028 earnings, up from -4.4x today. This future PE is lower than the current PE for the US Oil and Gas industry at 13.2x.
Analysts expect the number of shares outstanding to grow by 1.41% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.35%, as per the Simply Wall St company report.

Green Plains Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The company's significant future earnings are predicated on monetizing large carbon credits (e.g., 45Z tax credits and CCS), which exposes Green Plains to policy and regulatory risk if future governments change, delay, or reduce support for these credits, negatively impacting future revenue and earnings.
Ongoing protein market weakness due to oversupply and competition from soy crushing is creating margin pressure in high-protein feed ingredients, risking lower-than-expected gross margins and diversified revenue in the long term.
Green Plains is still incurring operating losses and took large non-cash impairment and restructuring charges to exit noncore assets, highlighting both execution risk in transitioning to higher-margin products and potential for inconsistent net earnings if transformation efforts stumble.
The company relies on sustained export demand and strong U.S. trade policy for export markets-trade disputes or protectionist policies (e.g., tariffs, breakdown in China/India/EU negotiations) could sharply reduce export volume and pricing power, impacting top-line revenue stability.
Significant operational improvements, cost reductions, and margin gains rely on continuous execution and retention of new management and cultural changes; any failure or delay in fully embedding this culture (including pending CEO appointment) could undermine efficiency gains, delaying margin expansion and overall profitability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $9.125 for Green Plains based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $12.0, and the most bearish reporting a price target of just $7.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $3.4 billion, earnings will come to $116.3 million, and it would be trading on a PE ratio of 6.8x, assuming you use a discount rate of 8.3%.
Given the current share price of $10.11, the analyst price target of $9.12 is 10.8% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Revise Green Plains Price Target Amid Mixed Sentiment and Industry Developments