From November, all buses in Quebec must be electric. Lion intends to take advantage of this. Photo: courtesy
What to do with the titles of Electric Lion, Therapeutic Knight and Walt Disney? Here are some recommendations from analysts likely to move prices in the near future. Note: the author may have a totally different opinion from that expressed.
Electric Lion (LEV, $ 15.98): A Factory Tour That Gives Confidence
Already enthusiastic about Lion Électrique’s growth potential, Benoit Poirier, of Desjardins Capital Markets, came out of the visit to the Saint-Jérome plant confident that the manufacturer is on the right track to meet its objectives over the next few years. years.
The analyst recommends to his clients to take advantage of the shit of 43% of the title since June to return to the title to which he appends the mention “speculative”.
“The first day of investors, the visit of the factory and the meetings with the senior executives allowed us to note the progress made since the beginning of the year to increase the rate of production”, evokes the analyst. The manufacturer has notably doubled its workforce to 900 employees since the start of the year.
The leaders also gave an overview of the construction progress of the Mirabel battery plant and the new plant in Illinois. The first is expected to go into production in the second half of 2022 after investments of $ 185 million. The 80% built Joliet, Illinois truck plant is also slated to start in the second half of 2022 and eventually produce 20,000 vehicles per year.
“These investments are critical for Lion to achieve its growth ambitions of producing more than 18,000 vehicles per year in the long term while cutting manufacturing costs in half,” adds Benoit Poirier, who warns that the capital expenditure is falling. will accelerate in the next quarter.
At the same time, the new Chief Commercial Officer, Brian Piern is working to build the sales team in Canada and the United States to capture his share of the opportunities in the adoption of electric vehicles. This effort extends to the sale of its electric trucks to other manufacturers (upfitters) who install their own equipment there for resale, as is already done by the manufacturer of tippers Boivin Évolution, of Lévis.
This strategy aims to expand the customer base, accelerate revenues, while sharing research and development expenses, explains the Desjardins analyst.
To facilitate the adoption of electric trucks and generate orders, Lion also supports buyers throughout the process. In particular, it plans to set up 20 to 22 service centers across the United States by the end of 2022.
The third Canadian trucker, Day & Ross, is currently testing the Lion Model 6, the analyst also reveals. These pilots are expected to help Lion shorten the order cycle from 8-11 months to 6 months.
Lion also confirmed that eight new vehicle models will be released by the end of 2022, in addition to the seven models already offered.
In the end, Benoit Poirier reiterates his target price of US $ 26, i.e. 2.25 times the discounted sales of 2025 (at the rate of 15.3%) or 1.2 times the discounted operating profit.
Knight Therapeutics (GUD, $ 5.21): A buy ahead of strong third quarter results
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