Energy Recovery (ERII) PT Lowered to $8 at B.Riley

B.Riley analyst Ryan Pfingst lowered the price target on Energy Recovery (NASDAQ: ERII) to $8.00 (from $10.00) while maintaining a Buy rating.

The analyst comments "Energy Recovery (ERII — Neutral, PT from $10 to $8) reported 2Q revenue of $12.0M, below our estimate of $16.9M and the Street’s $18.4M. Adjusted EBITDA in 2Q of ($2.6M) just missed our ($2.0M) and was below consensus of ($1.0M). Revenue remains below original expectations due to the impact of the Iran conflict, with financial guidance remaining withdrawn. Management expects many megaprojects slated for 2026 to be delayed, with some delays now formalized and communicated. The company noted that tendering, contracting, and construction activity for large plants has resumed in impacted areas, however, citing its recently announced Saudi Arabia win as an example. Management was also upbeat on its new manufacturing facility in Saudi Arabia, announced just last week. The facility should enable meaningful cost reduction with operating costs expected to be meaningfully lower than comparable costs in the San Francisco Bay Area. We are lowering our estimates and our price target from $10 to $8 as we await better visibility in the Middle East. The region remains key for Energy Recovery's Megaprojects business, though it sees broadening geographic diversification for its addressable market."

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