Westport Fuel Systems Inks Agreement To Increase Production Capacity In China
Westport Fuel Systems, announced a co-investment with its manufacturing partner in China to increase production capacity at their Yantai facility. The investment will be used to develop and supply proprietary High Pressure Direct Injection (HPDI) fuel injectors to a growing global market. Shares of Westport rose about 2% in Thursday’s extended market trading session.
Westport Fuel (WPRT) CEO David M. Johnson said, “We have shared a critical engineering and manufacturing partnership with one of the world’s leading tier 1 injector manufacturers and its predecessor company for HPDI fuel injectors since our first-generation HPDI product and are pleased to jointly invest in continued growth.”
Johnson further added, “Investment in the Yantai facility to expand manufacturing capacity responds to the growing global demand for clean, cost-effective heavy duty trucks powered by HPDI 2.0, particularly in Europe and China. The investment also allows the state-of-the-art facility to be further scaled relatively easily to meet future growth in Europe, in China and then in rest of the world.”
Global demand for HPDI 2.0 is growing. It utilizes renewable gas and offers a cost effective way for achieving carbon neutrality in heavy-duty, long haul trucking.
According to the company, fleet operators are investing in net-zero carbon commitments by purchasing HPDI 2.0 powered trucks fueled with renewable gas while also saving on operating costs. (See Westport Fuel stock analysis on TipRanks)
On March 17, H. C. Wainwright & Co analyst Amit Dayal reiterated a Buy rating on the stock and increased its price target to $16 (79.6% upside potential) from $5. Dayal said, “We believe the company is ramping its efforts to participate in the adoption of hydrogen fuel opportunity. Management believes hydrogen use in an internal combustion engine with an HPDI 2.0 fuel system, can be a very competitive option to reduce CO2 emissions in long haul transportation.”
Turning to rest of the Street, Westport Fuel has a Strong Buy consensus rating based on 4 unanimous Buys alongside an average price target of $13.33. This implies potential upside of around 49.6% from current levels. Shares of the company have risen a massive 717.8% over the past year.
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