Fuel Systems Solutions (FSYS) “Outperform” Rating Maintained But Target Price Reduced

Northland Securities maintained “outperform” rating for Fuel Systems Solutions Inc. (NASDAQ: FSYS) but reduced 2010 estimates and lowered the target price to $39.

The rationale being that the Italian government has, unexpectedly, decided to end automobile incentives. The LPG/CNG incentives in 2009 allowed the auto OEM’s to offer LPG/CNG product offerings as a differentiator and gain market share.

However, the removal of incentives will most likely result in LPG/CNG penetration rates to decline from the 30% range to 20%. Northland Securities expects Fuel Systems Solutions to be a key industry player and benefit from the auto incentives.