Clean Energy Fuel ‘s venture into dairy-based renewable natural gas might just be its saving grace in an industry highly sensitive to interest rates, according to Raymond James. The firm upgraded shares of the renewable energy company to strong buy from outperform, lifting its target price to $6. This implies an anticipated upside of 67% from Monday’s close. Shares jumped 8% on Tuesday. Clean Energy Fuels is down 25% so far this year as a range of worries drag renewable energy stocks. Softening demand and interest rates climbing to 16-year highs have put pressure on the clean tech industry, which includes companies whose business models require financing and make them sensitive to rates. Year to date, the Invesco WilderHill Clean Energy ETF (PBW) is down over 23%, while the broader S & P 500 has gained over 10%. CLNE YTD mountain CLNE ytd chart Analyst Pavel Molchanov listed Clean Energy Fuels as the exception to the rule, citing the firm’s anticipated ramp-up in the in-house production of dairy-based renewable natural gas, or RNG. Another factor in favor of the stock is the expectation that the Treasury Department will soon issue details around a new tax credit for clean fuel production. “In late 2023 or early 2024, the Treasury is set to spell out the value of the credit for various types of biofuels, based on their carbon intensity metrics — with dairy-based RNG screening arguably the best,” he wrote. Molchanov expects the firm’s dairy-based RNG production to add $120 million of incremental adjusted earnings before interest, taxes, depreciation and amortization in 2025, twice as much as the company’s 2023 adjusted EBITDA guidance of $50 million to $60 million. The analyst’s updated price target reflects his long-term expected RNG volume growth of between 10% to 15%. “We believe that once the Treasury unveils the rules, and investors can straightforward factor in Section 45Z into estimates for 2025 and beyond, Clean Energy shares should re-rate meaningfully higher,” he added. — CNBC’s Michael Bloom contributed to this report.