Custom Truck One Source ( NYSE: CTOS ) rallied on Thursday after DA Davidson started off coverage on the specialty trucks and equipment retailer with a Buy rating.
Analyst Michael Shlisky thinks secular tailwinds could support the stock even if the U.S. economy heads into a recession.
"In our view, CTOS has developed a unique position in an attractive Machinery sub-sector: bucket trucks and related products for the T&D and Telecom sectors."
The broad focus of the Kansas City-based company across manufacturing, selling, services and renting is seen yielding advantages related to purchasing, working capital and customer engagement.
CTOS is also seen benefiting from strong demand for electrical transmission and distribution amid the changing landscape for vehicles, as well as high demand for the telecommunications side of the business.
DA Davidson assigned a price target of $12 to CTOS to rep more than 40% upside potential. Shares rose 5.92% in late Thursday trading to $7.52. The 52-week high for NTOS is $9.40.
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Custom Truck One Source pops after DA Davidson issues bull call