A survey shows that 55% of parents plan to drive their children versus taking them to the bus stop.
Justin Sullivan/Getty ImagesYet another casualty of the pandemic has emerged: the iconic yellow school bus. A Cars.com survey has found that far fewer children will be riding buses in the new coronavirus-dominated world.
“The majority of parents will opt for their family vehicle as the primary mode of back-to-school transport, nearly double the number of parents sending their kids on the bus,” Jenni Newman, editor in chief for Cars.com (ticker: CARS), said in the company’s news release.
Specifically, 55% of parents plan to drive their children versus taking them to the bus stop—up about 10 percentage points from prepandemic levels. What’s more, the survey found that only 39% of parents are sending their kids back to the classroom, with 53% opting for online teaching.
School, of course, has been badly disrupted by the pandemic. Newman’s own children are attending Chicago public school virtually for the first segment of the school year. That was the district’s call. “The situation is fluid,” Newman said in an interview.
The fluidity makes the long-term impact of the virus difficult to predict, but Newman noted a couple of consistent themes popping up in recent survey work. “People are relying on cars for more parts of their life,” she said, with more people avoiding public transit. “Cars are mobile bubbles.”
More reliance on cars is a small benefit for the auto industry, but it isn’t likely to move the needle for investors. There are other stock market implications for the survey. Namely, the near-term outlook for school bus stocks is troubled.
That is already apparent in stock prices. Blue Bird (BLBD) is an independent school bus builder. The company competes with Thomas and IC Bus, which are subsidiaries of Daimler (DAI.Germany) and Navistar International (NAV), respectively.
Blue Bird shares are down 50% year to date, falling from a 52-week high in January at about $24 and not recovering with the rest of the market. Looking ahead, investors might want to pay attention to Blue Bird stock as data emerge on treatments and vaccines for Covid-19.
Blue Bird is a small stock, valued at about $320 million. There are two analysts covering the company. Craig Irwin at Roth rate shares the equivalent of Hold and has a $12 price target. Eric Stine from Craig-Hallum, rates shares Buy and has a $20 price target.
Cars.com stock, for its part, is down about 30% year to date, worse than comparable returns of the Dow Jones Industrial Average and S&P 500, but not dissimilar to other traditional automotive peers.
The traditional qualifier is needed. The Russell 3000 Auto & Auto Parts Index is up 76% year to date. But that gain is driven by Tesla (TSLA) shares, which are up about 350% year to date.
Cars.com connects buyers and sellers. During the pandemic, Newman said the service has become increasingly valuable to new- and used-car dealers who need to adapt to a touchless, virtual car-buying world.
Write to Al Root at allen.root@dowjones.com
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August 20, 2020 at 07:39PM
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