Rentech Shares Rally Again On Upgrade

DALLAS (AP) — Shares of Rentech Inc. rallied for a second-straight day after an analyst upgraded the stock, saying a deal to supply synthetic fuel for airline ground operations at Los Angeles International Airport was the strongest sign yet supporting the company's synfuels strategy.

Raymond James & Associates analyst Pavel Molchanov raised the stock Wednesday to "Market perform" from "Underperform."

This week's deal with eight airlines at LAX "represents arguably the most tangible validation of the company's synfuels strategy to date," he wrote in a note to clients.

Molchanov said the company will need to make other synfuels deals, but that the first one is usually the hardest. He said the company still faces financing and execution risks to its strategy.

The shares gained 20 cents, or 8.3 percent, to $2.60 in morning trading. On Tuesday, the stock soared 86 percent to close at $2.40.

The LAX synfuels deal is expected to begin in late 2012 after Rentech completes a biofuels plant in Rialto, Calif. The company signed a multiyear agreement to supply the airlines with up to 1.5 million gallons per year of renewable synthetic diesel to run ground-service equipment.