Ballard Power Systems Inc. (USA) (BLDP) Is Well-Positioned to Continue to Capture Awards, Says Carter Driscoll


So what to make of Ballard Power Systems Inc.’s (USA) (NASDAQ:BLDP) latest success? On Wednesday, the fuel-cell maker announced it received a letter-of-intent (LOI) to supply 40 fuel cell engines to its bus OEM partner Van Hool for deployment in two German cities. These buses are expected to be the first fuel cell bus deployments supported under JIVE I. Ballard Power shares soared nearly 5% today on the news.

In reaction, B.Riley FBR analyst Carter Driscoll reiterated a Buy rating on BLDP, with a price target of $6.00, which represents a potential upside of 60% from where the stock is currently trading. (To watch Driscoll’s track record, click here)

Driscoll commented, “Ballard expects to receive a purchase order and begin shipping against it in 2H18, but we would expect the bulk of the order to be filled in 2019. We estimate each engine, likely 85 kW, is at least $150k per engine, so this phase of JIVE I could be worth $6 million in revenues. The JIVE I program is funded to build 139 fuel cell electric buses and a second JIVE program, JIVE II, was announced on January 16 and should deliver another 152 buses in seven European countries. We believe Ballard is well-positioned to continue to capture awards from both programs. Furthermore, we believe this award should help demonstrate that Ballard’s opportunities in commercial hybrid electric vehicles extend beyond China.”

“Now that the fuel cell stack production facility with JV partner Synergy Hydrogen is up and running, we would expect a greater emphasis on growing unit sales as the dollar content per vehicle should be lower than in 2017 when Ballard was shipping full modules. We believe Ballard’s heavy-duty mobility strategy, in China and also in the EU and U.S., remains on track for substantial growth in 2018 and beyond,” the analyst added.

Overall, TipRanks points to caution when it comes to Ballard Power, with the Street divided on whether to be bullish, or sidelined on this clean energy solutions provider. Out of 4 analysts polled in the past 12 months, 2 rate BLDP a Buy, while two issue a Hold. When considering if this stock is an overvalued or undervalued contender in the market, it is worthy of note that analyst expectations indicate nearly 44% return potential, with the 12-month average price target standing at $5.38.

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