Lake Street analyst Ben Klieve reiterated a Buy rating on Local Bounti Corporation (LOCL – Research Report) today and set a price target of $10.00.
Ben Klieve has given his Buy rating due to a combination of factors that suggest a positive outlook for Local Bounti Corporation. Despite the company’s Q4 2023 results falling short of expectations, largely due to operational challenges in its outdated California facilities, Klieve remains optimistic about the company’s prospects. This optimism is rooted in the anticipated success of Local Bounti’s three modern, commercial-scale facilities, which are expected to be fully operational between Q4 2023 and Q2 2024. Klieve projects that as these facilities ramp up production and reach full capacity, they will significantly improve the company’s financial performance, transitioning from a $34 million EBITDA loss in 2023 to EBITDA profitability by 2025.
Furthermore, Klieve highlights the robustness of Local Bounti’s balance sheet, supported by existing credit facilities and the impending closure of a substantial new funding round. This financial backing is anticipated to not only support the operational scaling but also enable further expansion and reduce capital costs. Additionally, Local Bounti’s strong commercial relationships with major retailers are expected to facilitate the distribution of produce from the new facilities. Klieve sees the unfolding of Local Bounti’s value proposition throughout 2024 as these strategic advantages come into play, positioning the company as a compelling speculative buy with the potential for strong returns over the next 12 months.
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Local Bounti Corporation (LOCL) Company Description:
Leo Holdings III Corp is a blank check company.
