Alto Ingredients, Inc.’s ALTO renewable fuel exports faced pressure in the second quarter of 2026 as geopolitical disruption in the Middle East affected shipping economics between the United States and Europe. Although European demand remained robust, higher freight costs and reduced certainty around vessel availability from the Gulf Coast compressed the U.S.-to-Europe arbitrage. This made Brazilian exports more competitive in Europe and contributed to lower renewable fuel export volumes compared with the year-ago quarter.
The impact was visible in Alto Ingredients’ sales mix. Renewable fuel export gallons declined 2.2 million from the prior-year period because of freight costs and availability. However, export revenues increased $800,000, as the gallons sold commanded a significantly higher premium to domestic renewable fuel than a year earlier.
The export disruption did not prevent Alto Ingredients from placing its renewable fuel production. Strong domestic ethanol markets allowed the company to shift its product mix toward U.S. fuel-grade ethanol sales. Total renewable fuel gallons sold were 65 million in the second quarter, down from 66.8 million a year earlier, while total gallons sold, including specialty alcohol, increased to 88.5 million from 86.7 million.
Export conditions therefore remain an important variable for Alto Ingredients’ renewable fuel business, with freight costs, vessel availability and competition from Brazil affecting the economics of U.S. shipments to Europe.
What Do the Latest Metrics Say About Alto Ingredients?
Alto Ingredients, which competes with Green Plains Inc. GPRE and Aemetis, Inc. AMTX, has seen its shares decline 24.1% over the past month, underperforming the industry’s 2.9% growth. During the same period, shares of Green Plains have declined 7.4%, while Aemetis has gained 21.2%.
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From a valuation standpoint, Alto Ingredients’ forward price-to-sales ratio of 0.33 is lower than the industry’s average of 3.32. The company is also trading at a discount to Green Plains (with a forward price-to-sales ratio of 0.57) and Aemetis (0.39).
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The Zacks Consensus Estimate for Alto Ingredients’ 2026 and 2027 earnings per share has declined 27.8% and 66.3% to 39 cents and 28 cents, respectively, in the past 30 days.
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Alto Ingredients currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).