New Flyer target stock price boosted
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Hey there, time traveller!
This article was published 18/07/2015 (3809 days ago), so information in it may no longer be current.
EVEN though new orders in the second quarter at New Flyer Industries were far below the previous two quarters, the outlook for medium-term demand is good and prompted at least one analyst to increase the target price on the stock.
The Winnipeg bus maker reported 531 new orders, including firm orders and options, during the second quarter.
That’s down from 1,020 in the first quarter of this year but better than the 476 in the second quarter of last year.
But the company has 1,238 new firm and option orders pending from customers where approval had been granted but documentation not yet received.
At the end of the quarter, the total backlog was 7,011 units (valued at $3.49 billion) compared with 7,372 (valued at $3.54 billion) at the end of the second quarter of 2014.
About 72 per cent of the backlog is made up of more expensive buses incorporating clean-propulsion systems such as natural gas, diesel-electric hybrid, electric-trolley and battery-electric.
The total number of active units — defined as all requests for proposals received and in the process of review at New Flyer plus bids or proposals submitted by New Flyer awaiting customer action — at the end of the second quarter of 2015 was 7,571, an increase of seven per cent over the previous quarter.
The number of units in the total bid universe at the end of the quarter was 20,698, an increase of 1,317 over the previous quarter
Trevor Johnson, an analyst at National Bank Financial, raised his 12-month target price on New Flyer shares to $18 from $16.50.
In a note to investors, he said despite the fact second-quarter orders were below the robust levels realized in each of the previous two quarters, the upcoming order book is strong.
“With backlog positioned to grow to approximately four years of average production, and New Flyer Industries benefiting from improved profitability following the economic downturn, the company is one of the better-positioned TSX diversified yield equities in terms of earnings momentum,” he wrote.
— Martin Cash