Loop Industries strategic shift ‘logical extension,’ says Raymond James

Raymond James analyst David Quezada keeps an Outperform rating on Loop Industries after the company announced the sale of its land parcel in Becancour, Quebec for C$18.5M as well as cost reduction measures aiming to reduce its cash burn rate to $12.5M per year while significantly curtailing operations at the Terrebonne facility. The analyst believes the strategic shift is the "logical extension of the pronounced weakness" in Loop’s share price, which effectively precluded the minimum $100M in equity the company required to build the Becancour facility. Most investors "were wary of the significant equity needs" associated with the Becancour facility and ongoing cash burn by the company and, given that the commercialization can still occur through the planned facility in Korea, "this is a positive outcome that buys Loop time to reach commercialization," Quezada tells investors in a research note.