Westport to Snap up Stako for €5M; Street Says Buy

Westport Fuel Systems Inc. (WPRT) inked a deal to acquire Stako sp. z o.o. (Stako) for €5 million.

Stako is a global manufacturer of LPG fuel storage systems. It is a subsidiary of Worthington Industries Inc. and its portfolio includes 1,000 models of LPG storage tanks.

Westport Fuel Systems CEO David M. Johnson said, “The acquisition of Stako represents a fundamental step towards our ability to supply completely integrated fuel systems. As a foremost global supplier of alternative fuel systems, we are well-positioned to offer a range of industry-leading solutions to prominent global OEMs.” (See Westport Fuel Systems stock analysis on TipRanks)

On May 7, Westport Fuel Systems reported strong Q1 results. Total revenues came in at $76.4 million, which surpassed the Street’s estimates of $72.6 million and grew 14% from the year-ago period. The loss incurred in the quarter was $0.02 per share, compared to a loss of $0.01 per share estimated by analysts.

Following the Q1 results, H.C. Wainwright analyst Amit Dayal maintained a Buy rating and a price target of $16 (156% upside potential).

Dayal said, “Investors should expect some near-term variability in the company’s results as COVID-19 resurgence in growing markets and potential pressure from semiconductor shortages for its customers come into play. We believe the larger impact from these pressures could be felt in 2Q21, with performance sequentially improving thereafter. Accordingly, we are lowering our 2021 revenue estimates to $343.2M from $353.8M.”

Consensus among analysts is a Strong Buy based on 3 unanimous Buys. The average analyst price target stands at $13.33 and implies upside potential of 113% to current levels. Shares have skyrocketed 340.9% over the past year.

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