Caterpillar Partnership With Westport Will Provide A Competitive Advantage
Caterpillar Inc (NYSE:CAT) has signed an agreement with Westport Inc (WPRT), a global leader in natural gas powered engines, to co-develop natural gas technology for Caterpillar's engines. The company will incur R&D costs under the agreement, and the commercial production is expected to start within the next five years. It competes with other global industrial equipment and engine manufacturers such as CNH Global NV (NYSE:CNH), Komatsu (KMTUY.PK) and Volvo AB (VOLVY.PK).We currently have a Trefis price estimate of $108 for Caterpillar's Stock, which is 20% above its current market price.
Enhanced customer offering to provide a competitive advantage
Natural gas offers a significant price differential compared to diesel, which is presently used in the majority of Caterpillar's engines, and therefore Caterpillar's clients stand to benefit from fuel cost savings with natural gas-powered engines. Moreover, the natural gas powered engines are targeted to offer similar levels of operational effectiveness asComplete Story »