Is Calumet, Inc. (CLMT) a good stock to buy now?

Is Calumet, Inc. (CLMT) a good stock to buy now?
Is Calumet, Inc. (CLMT) a good stock to buy now?

Is CLMT a good stock to buy? We found a bullish thesis on Calumet, Inc. in the Stock Forester Capital Substack of Stock Forester. In this article we will summarize the bulls’ thesis on CLMT. Calumet, Inc. stock was trading at $28.72 on March 19. CLMT’s trailing and forward P/E were 23.06 and 11.35 respectively, according to Yahoo Finance.

Calumet, Inc. manufactures, formulates and markets a number of specialty brand products and renewable fuels in North America and internationally. CLMT has already generated strong returns, with shares up 38% so far this year and 88% over the past year, but the underlying thesis suggests further upside as the company approaches a major inflection point.

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While its fiscal 2025 results were largely in line with expectations, the market reaction overlooked a substantially improved business profile, driven not by margin expansion yet, but by a significantly strengthened balance sheet and operational execution. The company has aggressively refinanced its debt, eliminating near-term maturities in 2026 and 2027, extending its revolver through 2031, and reducing net leverage with resources from 8.2x to 4.9x, effectively eliminating the refinancing overhang that previously defined the equity narrative.

Operationally, the Specialties segment continues to demonstrate structural strength, maintaining margins above $60 per barrel along with significant cost reductions, improved performance and lower capital intensity, indicating lasting earnings power. Performance Brands has also demonstrated resilience, generating consistent growth despite divestitures.

Meanwhile, Montana Renewables remains the most volatile but highest upside segment, with temporarily weak results overshadowing structurally lower operating costs and a favorable regulatory outlook. The anticipated increase in the Renewable Volume Obligation (RVO) is expected to significantly increase renewable diesel margins, while the company’s SAF (Sustainable Aviation Fuel) strategy provides a clearer earnings path through contracted premiums of $1 to $2 per gallon, offering downside protection and visibility into future demand.

The market continues to undervalue Calumet by anchoring on its legacy perception as a leveraged specialty chemicals business with volatile exposure to renewables, without recognizing reduced downside risk, improved cost structure and validated asset value. Based on updated assumptions across all segments, the stock is estimated to be worth ~$35 currently, with potential to surpass $55 as SAF rises and margins normalize, implying substantial upside in the near term despite identifiable risks around execution, regulation and commodity volatility.

Previously, we covered a bullish thesis on Calumet, Inc. (CLMT) by Zerosumgame33 in April 2025, which highlighted margin inflection in biodiesel markets and Montana Renewables’ upside potential driven by tightening supply-demand dynamics and changes in RVO. The CLMT share price has appreciated by approximately 189.80% since our coverage. Stock Forester shares a similar view, but emphasizes the improved balance sheet and earnings visibility driven by SAF.

Calumet, Inc. is not on our list of The 40 Most Popular Stocks Among Hedge Funds. According to our database, 17 hedge fund portfolios held CLMT at the end of the fourth quarter, up from 18 in the previous quarter. While we recognize CLMT’s potential as an investment, we believe certain AI stocks offer greater growth potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that’s also benefiting significantly from Trump-era tariffs and the offshoring trend, check out our free report on best short-term AI stock.

Disclosure: None.

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