Blue Bird Corp (NASDAQ:BLBD) is facing growing demand and funding for buses, according to Bank of America analysts, who believe the school bus manufacturer has revamped its operations and has a well-established market share in non-diesel bus sales.
In a note to clients, they initiated coverage of Blue Bird stock with a ‘Buy’ rating and a target price of $26.50 a share.
"Blue Bird is also well positioned to lead in electrification for school buses, as $5 billion in federal funding ramps, and newer entrants'/ competitor's suppliers' falter," the analysts wrote.
"We expect to see continued outperformance as supply challenges fade and replacement demand sustains through the coming years," they added.
Analysts at Bank of America noted the company expects to derive more than $1 billion in revenue and 3,000 plus orders from the five-year EPA clean school bus program, as Blue Bird saw its electric vehicle (EV) bookings power 147% higher year over year during its fiscal third quarter and has about $180 million in firm EV orders included in its backlog.
Shares of Blue Bird climbed 6% to $21.76 in Friday afternoon trading and have gained 88% year to date.
Contact Sean at sean@proactiveinvestors.com