Friday - Cantor Fitzgerald has initiated coverage on PureCycle Technologies (NASDAQ:PCT) with an Overweight rating and a price target of $14.00. The firm highlights PureCycle's unique position in the recycling industry, leveraging patented technology to purify and transform polypropylene plastic waste into a renewable resource.
The analyst cites the company's differentiated technology and first-mover advantage in a market with a large total addressable market (TAM). PureCycle Technologies is recognized for its exclusive partnership with Procter & Gamble (NYSE:PG), which has led to the development of a globally patented purification process for polypropylene recycling. This FDA-approved technology is not only energy-efficient but also boasts a higher recycling rate compared to traditional chemical and mechanical recycling methods.
Polypropylene is one of the most widely used plastics globally, with more than 170 billion pounds produced annually. However, it has one of the lowest recycling rates, under 1%, according to IHS Markit. PureCycle's innovative approach to recycling could significantly impact this statistic, as the market for polypropylene recycling is expected to expand from $8.2 billion in 2022 to $13.5 billion by 2030.
The company aims to serve various industries by selling its ultra-pure recycled (UPR) resin to customers such as consumer goods manufacturers and food & beverage producers. PureCycle's first production line is anticipated to be near full capacity by 2025, with the company planning to start reporting revenues in the second half of 2024, marking a pivotal phase in its commercial operations.
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