Calumet, Inc. (CLMT): A Bull Case Theory 

We came across a bullish thesis on Calumet, Inc. on The Pale Blue Dot’s Substack by Saad Khan. In this article, we will summarize the bulls’ thesis on CLMT. Calumet, Inc.’s share was trading at $18.66 as of September 22nd. CLMT’s trailing and forward P/E were 23.06 and 11.35, respectively according to Yahoo Finance.

Calumet Specialty Products Partners ($CLMT) is a diversified specialty chemicals and fuels company with three core businesses: Specialty Products & Solutions (SPS), Performance Brands (PB), and Montana/Renewables (MRL). SPS and PB, generating mid-cycle EBITDA of roughly $285mm, are highly resilient due to a diverse customer base, flexible product offerings, and operational improvements including $42mm of cost reductions in H1 2025 and three consecutive quarters of strong throughput. Applying conservative industry multiples, these segments are valued at $2.3bn EV, or about $13 per share, implying an MRL EV of $1.1bn.

While MRL’s current EBITDA is modest at $65mm, there are compelling catalysts for a material inflection. Political support for biofuels, including higher Renewable Volume Obligations (RVOs) and reallocation of Small Refinery Exemptions (SREs), combined with MRL’s capacity expansion under the MAXSAF program, could lift EBITDA to $300mm+. MRL’s location in Montana allows feedstock optimization, and upcoming Sustainable Aviation Fuel (SAF) production is expected to benefit from a $1–$2 per gallon margin premium over renewable diesel.

Regulatory support, including favorable RIN pricing and reduced CLMT RIN obligations, enhances the upside. If these scenarios materialize, total company valuation using an 8x EBITDA multiple could exceed $30 per share, creating substantial upside from the current $17 level. Risks include unfavorable regulatory decisions, slower-than-expected capacity ramp, and high leverage, which could pressure free cash flow and equity returns. However, current EPA guidance and political trends suggest strong support for biofuels, setting the stage for a potential rerating and significant upside for investors positioned ahead of these catalysts.

Previously we covered a bullish thesis on Calumet, Inc. (CLMT) by Zerosumgame33 in April 2025, which highlighted the biodiesel margin inflection, MRL’s feedstock advantage, and potential upside from the 2026–2028 RVO. The company’s stock price has appreciated approximately by 88% since our coverage. The thesis still stands as regulatory support and MRL expansion continue to drive upside. Saad Khan shares a similar bullish view but emphasizes operational improvements in SPS and PB and the impact of SAF and MAXSAF capacity on long-term EBITDA.

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Disclosure: None.