Lion Electric Co (NYSE:LEV) had its Wallstreet debut on May 7, following the completion of the proposed SPAC merger with Northern Genesis Acquisition Corp. Lion Electric design and manufacture zero emission, all electric Class 5-8 trucks and buses. The merger transaction has raised $490 Million in funding for LEV to carry out their expansion strategy in 2021. This strategy includes the construction of a “state-of-the-art” US based vehicle manufacturing facility. In addition, the companies Q1 results saw revenue grow by 416% YOY. LEV also secured an order from First Student for 260 buses. With a strong bullish shift in investor sentiment, this article will breakdown everything investors need to know about Lion Electric’s stock forecast in 2021 and beyond.
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Are analysts bullish on Lion Electric stock?
Across the board of 5 Wallstreet analysts the average price target is currently $21.60 a share. This represents a 34% upside from the current trading price. It is clear the general consensus amongst “smart money” institutions is bullish with all targets setting a Buy or Outperform rating on the stock. Here’s the most recent coverage from analysts on LEV stock:
- National Bank of Canada 5/17/21 – Analyst Rupert Merer initiated coverage on LEV stock with a price target of $20 a share. The bank has an outperform rating on the stock, with a price target implying a 21% upside.
- Desjardins Securities 5/17/2021 – Analyst Benoît Poirier set a price target of $26 a share which is the “street high” target. This implies an upside of 57% from the current price of LEV.
- BMO Capital Markets 5/7/2021 – Analyst Jonathan Lamers set the firms price target to $22, an implied upside of 33%. The analyst noted LEV is “investing to expand assembly capacity nine-times to capitalize on the opportunity and to reduce costs and vehicle prices further” according to The Fly.
What does this mean for investors?
Firstly, from the coverage so far we can conclude that the general concensus amongst smart money institutions is strongly bullish. In addition, the 34% upside from the average target does suggest analyst are confident that there is room for LEV stock to grow in 2021. However, it’s important to note that the company has only been trading for a short period of time. Therefore, more institutions will likely cover the stock in the near future and provide investors with a greater pool of targets to determine fair value and a wider consensus.
Revenue forecasts for Lion Electric in 2021 and beyond
Looking ahead, revenue forecasts play a vital role in understanding financial health and longevity of the business. Looking at Lion Electric’s current revenue performance, the business turned over $6.2 Million in Q1 of 2021. The company forecasts revenue for the annual year at $204 million according to LEV investor presentation in November 2020. Majority of this sharp revenue growth will likely be driven by the delivery of pre-existing vehicle orders received for trucks and buses.
If we look longer term, Lion Electric expects revenue to grow to $1.67 Billion in 2023 and $3.6 Billion in 2024. It is worth noting, the company expects to deliver more trucks than buses in the 2023-24 period. From these long term forecasts we can see LEV are positioned extremely well to capitalise on growing demand. The drivers for this demand include the incorporation of all-electric truck and bus models by both companies and Governments.
What’s in the pipeline for Lion Electric?
Lion Electric look to have an exciting year ahead of them with strong demand for their vehicles. The companies Vehicle order book has 209 trucks and 608 buses. This represents a combined total order value of over $225 million in the pipeline. Furthermore, the companies order book for charging stations has grown to 76. LEV estimates this book value to be worth $800,000.
“Not only have we shown growth in revenues in Q1, but we have improved our order book. With 7 types of purpose-built electric vehicles available for purchase today and eight additional ones expected to be available by the end of 2022, our focus is to accelerate our growth and execute on our long-term strategy…”commented Marc Bedard, CEO – Founder of Lion.
In summary, we can conclude that the current analyst consensus is bullish with the average price target implying a 34% upside. After breaking down the revenue outlook, it is clear the company is confident in its order book value and the growth of the electric truck and bus industry. However, investing in the electric vehicle market does pose its own industry specific risks. The semi conductor shortage alongside increases in local and global competition will likely place additional pressure on the share price over the next 12 months.
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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