Significant news hit yesterday in the world of natural gas vehicles. Nat gas engine extraordinaire Westport Innovations (NASDAQ:WPRT) announced it will work with General Motors (NYSE:GM) for the advancement of natural gas engine technology. The company also announced it plans to open a new R&D center in Michigan.
"We are excited to work with GM and invest in advanced natural gas technology for the automotive market," said Ian Scott, President of Westport’s Light-Duty Division. "This technology offers the promises of a cleaner, lower cost fuel and reduced carbon footprint, while advancing the use of domestic energy. This agreement demonstrates Westport’s success as an advanced technology partner to global automotive manufacturers. Westport’s recent announcement regarding the planned acquisition of Emer S.p.A., of Italy, is an integral part of our strategy to provide partners, such as GM, with the most advanced integrated solutions."
Technically, WPRT remains one of the most bullish green stocks around. The stock nearly double in February/March, consolidated fairly quietly for several months following, held support around the 200 day moving average and now appears ready to get moving again with a gap up on yesterday’s announcement.
Jefferies commented on the partnership this morning, reiterating its Buy rating and $38 price target (nearly 60% higher than current levels). The firm believes that if the initial project is promising it could result in a formal agreement later next year. However, it should be noted that a major partnership with WPRT producing nat gas engines in volume for GM is at least a few years away.