Jefferies Comments on Westport Innovations (WPRT) Partnership with GM (GM)

Jefferies is reiterating its Buy rating and $38 price target on shares of Westport Innovations (NASDAQ: WPRT) following the recent partnership with General Motors (NYSE: GM) to develop natural gas engines for light-duty vehicles.

The initial project will run between 15 to 18 months and should cost WPRT less than $5 million. If the initial project shows promising results, the firm believes a formal development agreement could be announced in late 2012 or early 2013.

Jefferies notes that an official OEM qualification program to cost $10-20 million and take another 18 months.

An analyst at Jefferies comments, "Near term, we expect Westport to remain in a trading range until volume trends improve, there is resolution of the political landscape, or there is significantly more detail on the launches from Volvo and Weichai in 2012 with commercial volumes in 2014-2015."

The firm believes that the company's next steps will be signing an additional heavy duty engine OEM; and expanding an existing OEM relationship in an adjacent market or a new geography.

For more ratings news on Westport Innovations click here and for the rating history of Westport Innovations click here.

Shares of Westport Innovations closed at $24.00 yesterday.

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