Bank of America lifts Calumet stock target to $45

Calumet shares are surging 15.2% Tuesday after Bank of America raised its price target on the renewable fuels producer to $45 from $38. The stock had fallen 6.8% last week before the upgrade. As of 2:36 p.m. ET, Calumet was trading at about $45.50, giving it a 14% upside based on the new target.

The upgrade comes after Calumet reported stronger free cash flow in Q2 2026, which allowed it to retire $115 million in debt last month. The company generated roughly $54 million in free cash flow during the quarter, providing the financial flexibility to reduce leverage. Bank of America cited this improving balance sheet as the key reason for lifting its target, arguing that Calumet is positioning itself more securely for future growth.

Calumet says it plans to continue using cash from operations to pay down debt in coming periods, signaling further financial strengthening ahead. The company’s year-to-date gain now stands at 127%, well above its five-year average price-to-sales multiple of 0.33. At current levels, it trades at 0.75 times sales—still a premium to historical norms.

Despite the bullish momentum, some analysts warn the stock may not be a bargain yet. Alternative chemical stocks offer more attractive valuations, and Calumet wasn’t included in recent top stock lists from The Motley Fool’s Stock Advisor. While the company’s debt reduction and cash flow improvements are positives, investors should weigh the stock’s rapid run-up before jumping in.