The Calix Ltd (ASX: CXL) share price is out of form on Friday afternoon.
At the time of writing, the clean technology company's shares are down 3.5% to $4.99.
Not that longer term shareholders will mind too much. The Calix share price is still up just under 400% since the start of the year.
What is Calix?
Calix is a clean technology company developing environmentally friendly solutions for advanced batteries, crop protection, aquaculture, wastewater, and carbon reduction.
The company notes that its core technology has attracted considerable recognition, which has led to a number of partnerships. This includes with universities, research institutes, governments, and industry partners.
Is the Calix share price in the buy zone?
Despite the incredible rise in the Calix share price this year, one leading broker still sees value in it.
According to a note out of Bell Potter this week, the broker has retained its speculative buy rating and lifted its price target by 167% to $7.85.
Based on the current Calix share price, this implies potential upside of 57% over the next 12 months.
What did the broker say?
Bell Potter is very positive on the company's new subsidiary, LEILAC Group.
It is dedicated to the commercialisation and ongoing development of its Direct Separation technology for lime and cement, LEILAC (Low Emissions Intensity Lime and Cement).
This month the company revealed that the business will initially be funded via a A$24.5 million investment from US-based decarbonisation investor, Carbon Direct Capital Management. Carbon Direct will will take a 6.98% equity stake in the business.
The broker estimates that this values the LEILAC business at between A$350 million and A$500 million. However, it points out that this is a valuation for the technology today, rather than a future valuation.
Bell Potter commented: "In our view the transaction validates the emerging commercial viability of the LEILAC technology, and provides a point-in-time valuation for LEILAC Group."
It further explained: "We also note that the investment provides a point-in-time valuation for LEILAC Group, rather than a future valuation of the technology. Carbon Direct invests on behalf of institutional clients, to generate a capital return (while decarbonising). We see upside to this valuation, driven by: (1) continued de-risking of the technology via LEILAC-2; (2) the progression of current commercial MOUs to FID; and, (3) the emergence of a commercial scale LEILAC plant; which we expect over the next 12 months."
Bell Potter believes there is a huge opportunity for the business and feels it is well-positioned thanks to its first mover advantage.
The broker commented: "Governments are increasingly committing to a net zero greenhouse gas target by CY50 (e.g. EU, US, UK, NSW, VIC). If this is to be achieved, the IEA estimates that the global cement industry will need to capture 215Mtpa CO2 by CY30, and 1,355Mtpa CO2 by CY50. The targets are materially above the scenario analysis we currently utilise in our valuation methodology, which values the opportunity at A$7.63-11.45ps."
All in all, this could make it well worth keeping a close eye on the Calix share price over the next 12 months.
