Shares of Spartan Motors (SPAR) are on the rise after the company said it received a 2,237-unit walk-in van order from a North American online e-commerce and fulfillment company, which Craig-Hallum analyst Steve Dyer believes to be Amazon (AMZN). Dyer added that this announcement, combined with his industry checks, suggests potential upside to estimates.

ORDER FROM E-COMMERCE COMPANY: Spartan Fleet Vehicles and Services, a business unit of Spartan Motors, announced on Tuesday that it has been awarded a 2,237-unit walk-in-van order from a North American online e-commerce and fulfillment company. The order further expands the customer relationship and increases Spartan's share of the high-growth last mile delivery market. The new order specifies for a minimum of 2,237 walk-in vans to be built during the second half of 2019 at Utilimaster's Bristol, Indiana, flexible manufacturing facility.

ANALYST SAYS ORDER FROM AMAZON: In a research note to investors following the announcement, Craig-Hallum’s Dyer raised his price target for Spartan Motors to $15 from $12. The analyst believes the "leading North American e-commerce company" that placed the order is Amazon.com, and estimates the award is worth $70M, accretive to margins, and likely incremental to prior guidance. This announcement, combined with industry checks, suggests Spartan's business is "strong," the analyst contended. Further, Dyer thinks there could be upside to the company's consensus estimates, but is waiting to update his model until the company reports second quarter results in a few weeks to "gain better clarity on the financial impact of this award." The analyst reiterates a Buy rating on Spartan’s shares, as he believes it is in the early innings of becoming a much bigger and profitable company, led by a new management team focused on driving growth, profitability improvements, and free cash flow.

PRICE ACTION: In morning trading, shares of Spartan Motors have jumped about 11% to $10.96.