NEW YORK (AP) - Shares of diesel engine maker Cummins Inc. were on pace to open at an all-time high Monday after a Bear Stearns analyst upgraded the stock, saying many of Cummins' competitors won't be able to meet new emissions regulations.
Peter Nesvold raised his rating to ''Outperform'' from ''Peer Perform,'' and predicted the stock would rise 22.1 percent, to a price of $130, by the end of 2008. The new emissions rules are going to hurt Cummins' competitors over the coming years, he said, but the Columbus, Ind., company is set to benefit from the changes.
''This creates opportunities for Cummins to simultaneously increase content and raise prices,'' he said. ''Moreover, it creates material market share opportunities for Cummins, as weak competitors either cannot afford or don't have the technology to meet the new standards.''
Nesvold also predicted a ''massive wave of consolidation'' in the non-U.S. diesel engine market.
The analyst also upgraded shares of truck and parts maker Paccar Inc. to ''Outperform'' from ''Peer Perform,'' saying investors have underestimated the value of company's aftermarket parts business.
Cummins shares rose $3.50, or 3.3 percent, to $109.99 premarket. The stock closed at $106.49 Friday, and reached an all-time high of $108 Tuesday.
Paccar stock, which closed at $88.81 Friday, was not trading premarket.