CNBC’s Jim Cramer on Friday gave his evaluation on XL Fleet, the business and municipal fleet electrification provider that is anticipated to go public subsequent week through blank-check merger.
XL Fleet, based in 2009 to faucet into the rising electrical automobile economic system, is being focused by a particular objective acquisition firm (SPAC) known as Pivotal Investment, whose stock Cramer stated is undervalued.
The stock slipped about 0.3% Friday, closing at $15.32 per share.
“With Pivotal Investment trading at $15 going into the XL Fleet merger, I think the stock could be a steal,” the “Mad Money” host stated. “But if it starts flying next week, I’m begging that maybe you don’t chase it too much past $20.”
XL Fleet, which produces hybrid and plug-in hybrid powertrains, is the most recent in a string of recent market entrants by way of SPACs, one of many hottest matters on Wall Street. SPACs are based particularly to lift cash and buy personal firms, taking them public.
The powertrains the corporate produces are used to transition conventional gas-powered automobiles into hybrids on the meeting line. Their merchandise are at the moment utilized in some Ford, GM and Isuzu fleet vehicles.
The plug-in merchandise XL Fleet provides to outfit the Ford F-150 cut back carbon emissions by 33%, the corporate says.
XL Fleet plans a totally electrical system by 2022. It’s coming public in a 12 months the place a flood of firms are coming public through SPAC offers, particularly electrical automobile producers and associated firms. The firm is projected to usher in $21 million of income this 12 months, which it expects to develop to $647 million by 2023.
“What really sets XL Fleet apart, though, is that unlike most of the electric SPAC plays, its products are already on the road,” Cramer stated. “XL Fleet’s a little different in that their near-term forecasts are much more substantial than what you see from most of these SPAC names.”
Cramer does fear about two headwinds that XL Fleet faces. That consists of carmakers who’ve plans to make their very own totally electrical fashions, which would cut back the necessity for XL Fleet’s powertrains. Ford has its personal plans to launch electrical fashions of the F-150 and Transit Van in 2022.
Cahs-strapped state and native governments are one other headwind for XL Fleet, stated Cramer, who worries that the coronavirus pandemic might impression spending on inexperienced transportation initiatives.
In the meantime, the host thinks the stock of Pivotal Investments, the buying firm, is flashing a shopping for alternative.
“I’ve gotta tell you, if XL Fleet can get even close to hitting its forecasts for 2022 or 2023, and we get some clarity on that relationship with Ford and the F-150, this stock is cheap, darned cheap,” Cramer stated. “XL Fleet would be trading at just 3.3 times its 2023 forecast.”
Disclosure: Cramer’s charitable belief owns shares of Ford.