Lots of stocks suffered due to the coronavirus pandemic as the companies were forced to cease working. However, governments are lifting lockdowns and restrictions, and investors hope that futures will rebound soon.
Meanwhile, you have an excellent opportunity to build a portfolio while the shares are trading at low prices. Wall Street analysts recommend several stocks, which have a strong-buy rating. Westport Fuel Systems is one of them. This company works to develop clean transportation technology.
Westport is a leader in high-pressure direct injection technology, or HPDI for short. It engineers and produces natural gas engines, as well as fuel system components for passenger cars and commercial vehicles. Currently, the stock’s average price is $3.33 per share, and in the case of success, the shareholders could gain 242% over the year.
Colin Rusch, Oppenheimer’s analyst, has given the company’s shares a $3 price target, with a 209% upside potential for the next 12 months. Even though Westport is declining to provide guidance right now, due to the uncertainty surrounding coronavirus, Rusch believes that the company can weather the current crisis.
Meanwhile, Eric Stine, Craig-Hallum’s analyst, set his price target at $5 per share for the stock. The analyst’s target implies an impressive one-year upside potential of 415%.
Why are analysts so optimistic about this stock?
Westport experienced significant setbacks due to the coronavirus pandemic. Its Italian manufacturing facility was forced to shut down and hadn’t resumed operations until May 4. Analysts think that stock will probably report a first-quarter net loss of 5 cents per share in June.
Despite that, Westport revenues and earnings rose significantly in 2019. The stock managed to break even on the EPS in the fourth quarter, while experts predicted a 1-cent loss. Comparatively, Westport experienced an 8-cent loss quarterly during the previous year. Revenues also skyrocketed by 23% year-over-year in the fourth quarter, reaching $74.3 million.
According to analysts, Westport Fuel Systems is at very early stages of a meaningful growth ramp as straightforward economics are shifting to alternative fuels. The stock has already gained a competitive advantage. Additionally, Stine thinks that Westport will receive support from governments in Europe and Canada.