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On Monday, Jefferies adjusted its financial outlook for Ballard Power Systems (NASDAQ:BLDP), reducing the firm's price target on the stock to $2.00 from the previous $3.25. Despite this change, the investment firm maintained a Hold rating on the shares. This revision follows the company's reported revenues, which fell short of both consensus and Jefferies' own forecasts.
Ballard Power Systems reported quarterly revenues of $16.1 million, missing the anticipated $18.9 million consensus and the $19.6 million estimate set by Jefferies. The shortfall was primarily attributed to underperformance in the Bus, Rail, and Stationary sectors. However, this was somewhat mitigated by better-than-expected results in the Truck, Marine, and Emergency Management sectors.
The company's EBITDA for the period was reported at a loss of $35.4 million. This figure was slightly better than the consensus expectation of a $36.1 million loss but did not meet Jefferies' projection of a $34.2 million loss. Despite the mixed financial outcomes, Ballard Power's management has reiterated its guidance, expressing confidence in achieving positive gross margins in the fourth quarter.
The guidance also included an expectation that revenue in the fourth quarter would account for approximately 50-60% of the company's full-year revenue. This forward-looking statement by Ballard Power's management suggests a significant reliance on the latter part of the year to bolster the company's financial performance.
The adjustment in the price target reflects the latest financial results and projections provided by Ballard Power Systems. Jefferies' updated valuation of the stock is based on the company's current financial standing and its future revenue and margin guidance as stated by the management.
In other recent news, Ballard Power Systems reported its Q2 financial results, revealing $16 million in revenue primarily driven by growth in the bus market. The company also launched its ninth-generation PEM fuel cell engine, the FCmove XD, and is progressing with Project Forge to scale graphite bipolar plate production. Despite the slow pace of contract awards and policy uncertainty affecting market adoption, Ballard ended the quarter with $678 million in cash and expects gross margins to break even by Q4.
Ballard has reduced capital expenditure guidance for the year due to slow market adoption, but remains optimistic about the bus market, which saw a revenue increase of over 120% in the first half of the year. A final investment decision on the Texas facility is expected in 2024. The company is also advancing opportunities in the U.S. rail market and targeting the stationary power market through strategic partnerships, such as with Vertiv.
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