2023-06-15 16:23:58
CIBC analyst Hamir Patel lowers his recommendation on the title of Quincaillerie Richelieu. (Photo: 123RF)
What to do with the titles of Ballard Power, Quincaillerie Richelieu and Tesla? Here are some recommendations from analysts likely to move prices soon. Note: the author may have a totally different opinion from that expressed by the analysts.
Ballard Power (BLDP, US$5.34): Cost reductions and revenue growth on the agenda
The investor day recently held by Ballard Power Systems allowed it to put forward its priority terms, namely cost reduction and revenue growth, but also to demonstrate the progress it has made in this area.
The company says it has achieved a cost reduction of more than 60% compared to 2018, and is on track to achieve its target of 70% planned for 2024, said National Bank Capital Markets analyst Rupert Merer.
On the revenue growth side, Ballard Power is adding customers to its portfolio and progressing towards new commercial contracts, which should lead to increased volumes in the future. The order book is diversified both in terms of customers and markets, with strong demand for energy products dedicated to trucks, buses, trains and stationary products.
These two initiatives should thus improve gross margins, estimates the analyst, adding that the company aims for gross margins of approximately 25% by fiscal year 2030 as well as earnings before interest, taxes and amortization ( EBITDA) positive before that date.
Rupert Merer adds that Ballard Power’s balance sheet is strong enough to weather the storms. With US$864 million in cash flow at the end of the first quarter, the company can easily finance its growth plan as well as the losses over the next few years. Ballard further has a capital investment plan of approximately US$300 million by fiscal year 2027, with between US$40 million and US$60 million planned for this year.
National Bank maintains its performance forecast equal to its sector of activity for the stock of Ballard Power, as does its target price of US$7.
Quincaillerie Richelieu (RCH, $42.17): the renovation industry in slow motion
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