Shares of Westport Fuel Systems’ soared 38.9% on Friday after the natural gas-fueled engine maker said that its Weichai Westport Inc. (WWI) joint venture (JV) received Chinese certification for its 12-liter high pressure direct injection (HPDI) 2.0 engine. The certification from the Ministry of Ecology and Environment of China was held up because of “delays introduced by COVID-19,” said Westport’s CEO David Johnson.
According to the agreement, Westport Fuel (WPRT) will supply HPDI 2.0 components to WWI. In turn, WWI will sell HPDI 2.0 engines to various truck equipment manufacturers.
Westport’s CEO said “The China VI emission regulations are aligned with leading heavy-duty emission standards in Europe and North America, combine the best practices from both regulations, and are one of the most stringent heavy-duty vehicle emission standards in the world.” (See WPRT stock analysis on TipRanks).
On Sept. 18, Oppenheimer analyst Colin Rusch assigned a price target of $3 (33.3% upside potential) on the stock, after Westport’s JV received certification. Rusch believes “the company is proving the viability of its key growth driver over the next several years.” He added “WPRT is working on establishing additional customers and see this announcement as helping those customers decide to move forward to avoid falling too far behind the competition. We believe an additional customer announcement would prove to further catalyze shares.”
Currently, the Street is bullish on the stock. The Strong Buy analyst consensus is based on 3 Buys. The average price target of $4 implies upside potential of about 77.8% to current levels. Shares have declined 5.1% year-to-date.
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