Hudson Technologies Upgraded to Buy with $10.50 PT by Canaccord

Canaccord has upgraded Hudson Technologies to Buy from Hold with a price target of $10.50, up from $6.75. The firm expects favorable pricing due to tariffs and restrictions on China and Mexico, combined with restricted HFC supply. The analyst notes that Q2 saw favorable pricing drive margin expansion despite light volumes.

Canaccord Genuity has upgraded Hudson Technologies (NASDAQ: HDSN) to a "Buy" rating from "Hold," with a new price target of $10.50, up from $6.75. The firm's analysts cited favorable pricing due to tariffs and restrictions on China and Mexico, combined with restricted HFC supply, as key drivers for the upgrade [1].

Hudson Technologies, a leading provider of innovative solutions to the HVACR industry, released its Form 10-Q report for the second quarter of 2025, highlighting financial performance and operational activities. The report indicated that GAAP EPS reached $0.23, surpassing the $0.17 GAAP analyst estimate, and GAAP revenue came in at $72.8 million, beating the $71.7 million GAAP consensus. Despite a 3% year-over-year decline in revenue, gross margin improved to 31% due to price increases and growth in reclaimed refrigerant sales [2].

The company attributed the revenue decline to a slow start to the cooling season in the North-East and Mid-West regions due to milder weather conditions. However, the integration of the 2024 acquisition of USA Refrigerants expanded Hudson's reach and increased recovered refrigerant volume, supporting its position as a national leader in refrigerant reclamation [2].

Canaccord expects favorable pricing trends to continue, driven by tariffs and restrictions on key markets, as well as the ongoing phase-down of newly manufactured HFCs under the AIM Act. The analyst noted that Q2 saw favorable pricing drive margin expansion despite light volumes, highlighting the company's ability to navigate challenging market conditions [1].

Hudson Technologies continues to focus on its core business of refrigerant reclamation and management services, leveraging its position as one of the largest refrigerant reclaimers in the United States to support sustainable practices in the HVACR industry. The company's strong cash position and lack of debt provide capital for future investments or share repurchase programs [2].

For investors, important issues to monitor in upcoming quarters include the integration and growth impact of the USA Refrigerants acquisition, progress on inventory and working capital management, the evolving regulatory environment, and future trends in pricing for both new and reclaimed refrigerants. As the industry transitions away from newly manufactured HFCs, Hudson's ability to ramp up its reclamation business while maintaining profitability will be closely watched [2].

References:
[1] https://www.tradingview.com/news/tradingview:4705a5bca748a:0-hudson-technologies-inc-ny-sec-10-q-report/
[2] https://www.aol.com/finance/hudson-hdsn-q2-eps-jumps-164749265.html