On Tuesday, Blue Bird Corp (NASDAQ:BLBD) received a price target increase from Roth/MKM, with the target being raised to $40 from $36, while maintaining a Buy rating on the stock. The adjustment follows recent market developments indicating a surge in demand for electric vehicles (EV), particularly in the school bus segment.
The company's positive outlook is reinforced by last week's request for proposal (RFP) initiated by Zum for the purchase of 2,500 electric vehicle (EV) school buses. This procurement is noted as the largest planned EV school bus purchase to date, with expected deliveries stretching into 2029. The analyst from Roth/MKM highlighted the significance of this move, stating that it underscores the growing demand and support for EV school buses from third-party operators.
In addition to Zum's RFP, the market has seen other substantial RFPs, each for several hundred units, which suggests a robust market for electric school buses. These large-scale procurement plans are seen as a strong indicator of the sector's momentum and are expected to contribute positively to Blue Bird's business prospects.
The analyst anticipates that the delivery rate of these EV school buses will likely be influenced by the pace of charging infrastructure installations. As infrastructure development progresses, it is expected to accommodate the growing fleet of electric buses, enabling more widespread adoption and delivery of these vehicles.
InvestingPro Insights
Following the recent positive developments for Blue Bird Corp (NASDAQ:BLBD), including the price target increase by Roth/MKM, InvestingPro data and tips provide further insights into the company's financial health and market performance. Blue Bird is currently demonstrating a strong market presence with a market capitalization of $1.09 billion USD, and it has been trading at a Price / Book ratio of 14.48, indicating a high valuation relative to its book value as of Q1 2024.
An InvestingPro Tip highlights that analysts are optimistic about the company's future, predicting that net income is expected to grow this year. This aligns with the company's substantial revenue growth of 33.91% over the last twelve months as of Q1 2024. Additionally, Blue Bird has shown a remarkable 91.76% return over the last year, which may interest investors looking for strong past performers.
Moreover, with Blue Bird's shares trading at 87.1% of their 52-week high and a recent large price uptick over the last six months, showing an 85.99% price total return, the company's stock performance reflects the growing market demand for electric vehicles, particularly in the school bus segment that Blue Bird serves.
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