Cummins Inc. has been awarded a $6.9 million contract by the U.S. Army to research and develop power train technologies over the next three years.
The contract calls for the Columbus, Ind.-based diesel engine manufacturer to develop a power train that improves efficiency by reducing fuel consumption and noise, and can run on a wide range of fuels and fuel mixtures.
Cummins received the contract on Thursday and is expected to perform research and development at its Columbus operations until Sept. 9, 2013.
The company was one of nine bidders vying for the work from the U.S. Army Tank and Automotive Command Contracting Center in Warren, Mich.
Meanwhile, shares of Cummins rose Monday after a Goldman Sachs research analyst named it a top pick, saying he expects the stock to gain because of the engine maker’s strong sales growth, Associated Press reported.
Analyst Jerry Revich set a price target of $104 on the stock, causing shares to rise $2.89, or 3 percent, to close Monday at $84.81 each. Shares have climbed steadily from a 52-week low of $41.51 reached last October.
The government's focus on engine fuel economy and higher emission standards will drive sales in Cummins’ components division by far more than analysts currently anticipate, Revich predicted. He forecasts $1 billion in new product sales in 2011-12.