Westport Fuel Systems (WPRT) - Get Report shares soared on Monday after the company agreed to supply natural-gas truck engines to online-retail titan Amazon.com’s (AMZN) - Get Report U.S. truck delivery fleet.
Shares of the Vancouver company at last check were surging 41% to $12.22.
The engines will power the Seattle e-commerce giant's vehicles operating between warehouses and distribution centers.
“Amazon is excited about introducing new sustainable solutions for freight transportation and is working on testing a number of new vehicle types including electric, [compressed natural gas] and others,” the retail giant told Reuters in a statement.
Amazon is looking to have net-zero carbon emissions across the whole company by 2040 and aims to have half of all shipments be net zero by 2030.
The company has ordered more than 700 compressed-natural-gas class 6 and class 8 trucks so far, according to Reuters.
Craig-Hallum Capital Group analyst Eric Stine reiterated his buy rating on the Westport Fuel Systems and more than doubled his price target, to a Wall-Street-high view of $24 from $12, according to the Fly.
Stine says the deal was “arguably one of the most significant events for natural gas for transportation in many years.”
Westport is in a “prime position to capitalize” on this tailwind, and the order should solidly add to the company’s earnings before interest, taxes, depreciation and amortization, the analyst said.
The coronavirus pandemic has sparked a surge in deliveries to homes as consumers have quarantined. The increased traffic has also increased pollution levels.