On Wednesday, Blue Bird Corp (NASDAQ:BLBD), a leading school bus manufacturer in the United States, received a positive outlook from BTIG with the initiation of coverage on the company's stock. The firm set a Buy rating and established a price target of $55.00, highlighting the company's strong presence in the alternative fuel school bus market.
Blue Bird, recognized as one of the top three U.S. school bus original equipment manufacturers (OEMs), has been commended for its market-leading position in alternative fuel vehicles, which includes buses powered by gasoline, propane, natural gas, and electric. While the company also caters to the conventional diesel bus market, it emphasizes value over volume in this segment.
BTIG expressed optimism for Blue Bird's stock, noting its significant increase over the past year, with a rise of over 100%. The firm anticipates further growth in the North American school bus market and expects Blue Bird to benefit from a continued trend toward alternative fuel buses. This shift is projected to drive market share gains, as approximately 60% of Blue Bird's bus deliveries currently involve alternative fuel models, suggesting potential for further growth and favorable product mix.
The analyst pointed to Blue Bird's comprehensive product range, which includes Type A, C, D, and specialty buses, as well as a variety of powertrain solutions, as evidence of the company's competitive position. This diverse portfolio enables Blue Bird to meet customer needs and maintain a strong market share, estimated at around one-third of the market.
In conclusion, BTIG's positive stance on Blue Bird is based on the medium-term prospects for the North American school bus market and the company's strategic positioning to capitalize on these opportunities. The firm's initiation of coverage with a Buy rating and a price target of $55.00 reflects confidence in Blue Bird's potential for continued success.
In other recent news, Blue Bird Corporation's earnings and revenue have seen significant growth. The company reported record-setting fiscal 2024 third-quarter earnings, indicating a substantial increase in profitability and robust growth in net orders for buses, including a surge in electric bus sales. This equates to approximately $775 million in potential revenue.
Blue Bird is also investing in capacity expansion, supported by an $80 million grant from the Department of Energy, which will allow for the production of up to 14,000 buses annually and the creation of about 400 new jobs.
In addition to these developments, Blue Bird's stock was recently downgraded by Roth/MKM from Buy to Neutral due to concerns over delays in the Environmental Protection Agency's funding distribution process. This was coupled with recent leadership changes at Blue Bird, with CEO Phil Horlock assuming the additional role of President following the resignation of Britton Smith.
In parallel, Amentum announced its future board of directors following the impending merger with Jacobs™ Critical Mission Solutions and Cyber and Intelligence businesses.
InvestingPro Insights
Blue Bird Corp's (NASDAQ:BLBD) strong market position and growth potential highlighted by BTIG are further supported by recent financial data and insights from InvestingPro. The company's market cap stands at $1.34 billion, reflecting its significant presence in the school bus manufacturing industry.
InvestingPro data shows that Blue Bird has experienced impressive revenue growth, with a 19.53% increase in the last twelve months as of Q3 2024. This aligns with BTIG's optimistic outlook on the company's market expansion. The company's profitability is also noteworthy, with a P/E ratio of 13.48, indicating a reasonable valuation relative to its earnings.
Two key InvestingPro Tips reinforce the positive sentiment:
1. Blue Bird's net income is expected to grow this year, which supports BTIG's bullish stance on the company's future performance.
2. The company has been profitable over the last twelve months, demonstrating its ability to capitalize on the growing alternative fuel bus market.
These insights complement BTIG's analysis of Blue Bird's strong market position and growth prospects in the alternative fuel school bus segment. For investors seeking a deeper understanding of Blue Bird's financial health and market potential, InvestingPro offers 11 additional tips, providing a comprehensive view of the company's investment profile.
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