Bank of America says Blue Bird is a winning post-pandemic growth story for investors. The firm initiated coverage of the school bus manufacturer with a buy rating on Friday, accompanied by a $26.50 target price. BofA’s forecast implies more than 29% upside from Thursday’s $20.49 close. Blue Bird stock has soared more than 91% from the start of the year. BLBD YTD mountain Blue Bird stock. Analyst Sherif El-Sabbahy labeled Blue Bird “a turnaround story with significant upside,” and lauded the company’s ability to navigate difficult macroeconomic headwinds including higher costs and inflation. “Blue Bird’s efforts to turn around the business amid significant cost inflation have revamped financial performance, showing through in EBITDA margin and (importantly) the cash flow statement,” El-Sabbahy said. Meanwhile, the analyst also said Blue Bird has ample exposure to the green energy transition and could emerge as a leader in the sector’s effort to electrify vehicles. The bulk of the company’s sales already come from non-diesel buses, and its bookings for EV buses were up 147% in the fiscal third quarter compared with last year. “Blue Bird is also well positioned to lead in electrification for school buses, as $5bn in federal funding ramps, and newer entrants’/ competitor’s suppliers’ falter,” he said. — CNBC’s Michael Bloom contributed to this report.
