Blue Bird’s Strategic Expansion and Improved Margins Drive Buy Rating with $49 Price Target

Needham analyst Chris Pierce has reiterated their bullish stance on BLBD stock, giving a Buy rating on May 8.

Chris Pierce has given his Buy rating due to a combination of factors including Blue Bird’s strategic expansion into the class 5/6 truck market, which presents a significant growth opportunity beyond their traditional school bus sector. Despite the current stock valuation not fully reflecting this potential market expansion, Pierce believes that even modest gains in market share could positively influence Blue Bird’s long-term prospects.
Additionally, the company’s improved margin profile, which is expected to drive a higher return on invested capital, along with a strong unit backlog, supports this optimistic outlook. The $49 price target set by Pierce is based on a multiple that aligns with Blue Bird’s historical averages, yet it accounts for these enhancements in profitability and conservative margin assumptions, balancing out the uncertainties related to electric vehicle school bus deliveries and associated funding issues.

According to TipRanks, Pierce is an analyst with an average return of -12.8% and a 37.29% success rate. Pierce covers the Consumer Cyclical sector, focusing on stocks such as EVgo, Sonic Automotive, and Blue Bird.

In another report released on May 8, D.A. Davidson also maintained a Buy rating on the stock with a $61.00 price target.