UPDATE: Wunderlich Securities Starts Power Solutions (PSIX) at Buy

Wunderlich Securities initiated coverage on Power Solutions (NASDAQ: PSIX) with a Buy rating and a price target of $50. Analyst Liam D. Burke called the company a "solid niche industrial company" and said the industry was seeing strong underlying demand, while barriers to entry remain relatively high.

"Despite the value proposition of PSI's alternative fuel engines, PSIX shares have been under pressure in 2015. Moderating energy production growth has slowed the growth of PSI’s alternative-fuel solution offered to the oil and gas sector despite the economic and environmental benefits of PSI systems. Longer term, the value proposition of the PSI solution should result in oil- and gas-related revenue growth, even with an uncertain energy production outlook. As automotive OEMs place more emphasis on serving the passenger vehicle and light truck market, PSI has multiple opportunities to serve diverse, niche markets in both on-road and off-road vehicle applications," said Burke.

"The alternative engine segment serves diverse applications within broad
industry categories such as materials handling and oil and gas. PSI operates
in narrowly defined markets that have less appeal to traditional engine
manufacturers and, with the company’s continued technological innovation
driving new production processes, the cost of entry into the alternative engine
business is relatively high," continued the analyst. "

Burke added, "Even with 2015 being a down year, we forecast EPS to grow well over 50% in 2016."

For an analyst ratings summary and ratings history on Power Solutions click here. For more ratings news on Power Solutions click here.

Shares of Power Solutions closed at $28.64 yesterday.

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