Shares of engine parts maker Cummins Inc., soared yesterday after Caterpillar Inc. announced a business deal with truck maker Navistar International Corp. - a move an analyst said will boost business for Cummins.
Shares rose $6.25, or 9.9 percent, to $69.38.
Earlier Thursday, Caterpillar, one of the world's largest makers of heavy machinery, announced a deal to develop medium- and heavy-duty trucks with Navistar. It also said it will no longer supply truck engines to other on-highway truck builders.
Wachovia Capital Markets analyst Andrew Casey said Caterpillar's departure from the on-highway truck engine business will lead to a higher market share at Navistar, truck maker Paccar Inc. and, potentially, Daimler AG's North America segment.
"This announcement is positive for Cummins," Casey said, maintaining his "Outperform" rating on the Columbus-based company.
Cummins shares have risen about 66 percent from a 52-week low of $38.11 in January.