Loop Industries. Buy, Sell or Hold?

Roth Capital Markets analyst Gerry Sweeney maintained his “Buy” rating and $3.00 price target on Loop Industries (Loop Industries Stock Quote, Chart, News, Analysts, Financials NASDAQ:LOOP) following the company’s announcement of a planned European facility, which he views as an important step in validating its licensing model and scaling strategy.

Sweeney highlighted Loop’s selection of BASF’s industrial park in Schwarzheide, Germany, as the site for its first European manufacturing facility. The 70,000-metric-ton plant will be developed through a joint venture with Reed – Société Générale Group and is expected to be operational by 2030.

Loop Industries uses a proprietary process to break down low-value PET plastic waste into base materials that can be reused to produce food-grade plastic and polyester. The new facility will replicate the design of the company’s India plant, demonstrating the repeatability of its model.

“We anticipate additional opportunities may follow suit,” Sweeney said in his March 20 report, pointing to future licensing potential.

The integration within BASF’s industrial ecosystem is expected to provide infrastructure and operational advantages, while the partnership with Reed – Société Générale brings institutional capital support. Sweeney said the project also addresses a key supply gap in Europe, where demand for 100% recycled, food-grade PET remains constrained, particularly in food and pharmaceutical applications.

He added that supportive regulatory tailwinds, including European circular economy initiatives, and environmental benefits such as lower carbon emissions versus fossil-based alternatives, strengthen the project’s long-term outlook.

Sweeney emphasized that the facility represents Loop’s first major step into a capital-light licensing model, which could improve returns and accelerate global expansion. Under the structure, Loop is expected to generate revenue through licensing and engineering services during development, with initial contributions beginning in 2026.

“The development follows the December 2024 technology license agreement and the formation of Infinite Loop Europe,” Sweeney said, adding that the company has already received a €10-million upfront license payment.

Sweeney forecasts Loop will generate Adjusted EBITDA of negative $10.0-million on revenue of $0.6-million in fiscal 2026, improving to negative $0.3-million on revenue of $5.4-million in 2027 as commercialization progresses.

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