Analyzing the Investment Potential of Lion Electric, SNC-Lavalin, Bell, and Thomson Reuters: Expert Recommendations and Analysis

2023-08-04 21:55:03

(Picture: courtesy)

What to do with the securities of Lion Electric, SNC-Lavalin, Bell and Thomson Archyde.com? 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.

Lion Electric (LEV, $2.35): it still has to pave the way to profitability

Benoit Poirier of Desjardins Securities believes that investors will be there again when Lion Electric has completed its capital investment phase and has proven that it is on the road to profitability.

Already, according to the results released in the second quarter of 2023, a better average selling price and its sales volume allowed it to obtain for the first time in six quarters gross margins of 0.7%, beating same blow the predictions of analysts.

A delay in a grant, however, hurt its revenue and vehicle deliveries, the organization said when it released its results. It thus generated revenues of 58 million American dollars (M$US), and not of 60.5 M$ or 66.1 M$ as what the analyst and the consensus respectively counted on.

In addition, 199 vehicles left its factory. That’s 94 more than it produced at the same time last year. According to the analyst, the increase in its production capacity seems to follow the game plan it had set itself.

Lion Electric also reported losses before interest, taxes, and amortization of US$9.7M, which is better than analyst and consensus expectations of $15.6M US and US$19.8 million.

Just after the end of the quarter, recalls Benoit Poirier, the Saint-Jérôme company agreed to obtain financing of US$142 million. This will serve to increase the size of its manufacturing operations, which will help pave the way to profitability. In the second quarter, it had US$44 million in cash, while in the previous quarter, it had US$36 million.

The value of its order book for electric vehicles, at US$625 million, is identical to that of the previous quarter, while the number of charging stations ordered slipped from 347 to 275.

After such results, the analyst is raising his expectations for the revenue the company should generate in the fiscal year from $273 million to $278 million. However, he believes that it should have more losses before interest, taxes and adjusted amortization in 2023 and 2024. He is now betting on $58.3 million and $15.7 million respectively. Its earnings per share target in 2024 also slips, from -$0.25 to -$0.26.

Nevertheless, Benoît Poirier reiterates his buy recommendation and his target price of US$4.

Catherine Charron