The investment firm moved after the specialty refinery last week agreed to buy an Alabama refinery from Royal Dutch Shell undefined undefined for $75 million.
Shares of the Houston company at last check rose 29% to $10.05.
"Vertex thinks the hydrocracker conversion cost is significantly less than a greenfield project to produce renewable diesel," Stifel analyst Michael Hoffman said in a note titled in part "Did Not See this Coming."
He values the company's legacy assets at $2 and the addition of the Shell refinery at another $15, with "an assumption for some walk down of subsidies."
Stifel has a buy rating on Vertex Energy.
Terms call for Vertex Energy to acquire the Mobile Chemical LP Refinery and associated logistics assets.
Vertex says the refinery has the potential to generate at least $3 billion of annual sales and $400 million of gross profit each year beginning in 2023, “given current refining economics.”
The acquisition "positions us to become a leading regional supplier of both renewable and conventional products," Vertex Chief Executive Benjamin P. Cowart said in a statement.
The Mobile refinery has capacity to process 91,000 barrels a day.
As part of the deal Vertex also will acquire about 3.2 million barrels of product storage, inventory, logistics and distribution with more than 860 acres of developed and undeveloped land.
Vertex expects to initiate an $85 million capital project to modify the Mobile refinery's hydrocracking unit to produce renewable diesel fuel.