Deutsche Bank Cuts Westport Innovations Inc. To Hold, From Buy

Westport Innovations Inc.'s

short-term stock value could be a causality of lower oil prices, an analyst said Friday. Deutsche Bank's Vishal Shah cut his rating to Hold from Buy on the Vacouver maker of propane and natural gas engines. Westport on Thursday posted a 46 percent decline in third-quarter revenue and said it would fire 9 percent of its staff. Management agreed to a 15 percent pay cut in exchange for richer stock options. The company, with a market capitalization of just $381.9 million, recovered from steep losses earlier Friday and traded recently down about 2 percent. Its revenue decline got blamed on stronger competition from gasoline engines in light of lower oil prices, as well as "geopolitical instability" in key growth markets and the timing of revenue from certain customers. Westport, formed out of a series of joint ventures, was listed on the NASDAQ system in 2008 and has yet to turn a profit. Shah believe the company "remains on track" with a plan to break even in 2015 on earnings before interest, taxes, depreciation and amortization. "But we see limited near-term catalysts" to move the stock higher, Shah said, cutting his target to $8 a share, from $12. Oil prices have fallen 25 percent this year, hitting a four-year low recently, with Brent crude trading at $82.60 a barrel. Reuters reports that its monthly poll of analysts predicts an average price of $93.70 in 2015.