Analysts have raised their price target for Blue Bird from $55 to $65 per share, citing continued margin improvements and strong post-earnings performance as key factors in their updated outlook.
Analyst Commentary
Following the recent price target increase, analyst commentary reflects both optimism about Blue Bird's outlook as well as awareness of potential challenges.
Bullish Takeaways
- Bullish analysts highlight Blue Bird's robust post-earnings share price momentum, with the stock rising approximately 30% after earnings outperformance and raised guidance.
- There is confidence in the company's ability to continue expanding gross margins, which have shown notable improvement over the trailing 12-month period.
- Improved execution on both revenue growth and cost management is seen as a key driver behind the company's upward valuation revision.
- The expectation is that increasing sales volumes and firming average sales prices will further enhance profitability.
Bearish Takeaways
- Bearish analysts caution that the stock's rapid appreciation after recent earnings may have priced in a significant portion of the company's execution successes.
- There are concerns about whether margin expansion can be sustained over the long term, especially if input costs or market dynamics shift.
- Some observe that while overall performance has been strong, the company could face headwinds if economic conditions soften or the market for school buses becomes more competitive.
What's in the News
- Central States Bus Sales, Blue Bird's largest authorized dealer in North America, has opened a new Sales, Parts and Service Center in Prattville, Alabama. This initiative is creating about 20 new jobs in the local community (Client Announcements).
- Guilford County Schools has purchased ten 2025 Blue Bird Vision Propane 72-passenger school buses, which operate entirely on clean propane autogas. These buses help reduce emissions and are expected to lower annual fueling and maintenance costs (Client Announcements).
- Micro Bird USA LLC, a joint venture of Girardin Minibus and Blue Bird, celebrated the grand opening of a 156,000 square foot manufacturing facility in Plattsburgh, New York. This facility employs over 225 people, with plans to expand to 350 team members (Business Expansions).
Valuation Changes
- Fair Value: No change, remains at $62.38 per share.
- Discount Rate: Increased slightly from 8.26% to 8.39%.
- Revenue Growth: No change, holding steady at 4.59% year-over-year.
- Net Profit Margin: Remains effectively unchanged at 9.33%.
- Future P/E Ratio: Increased marginally from 15.65x to 15.70x.
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