Workhorse Is Nevertheless a Acquire In spite of USPS Contract Delay, Says Analyst

Investors have revealed a whole lot of really like for all fashion of electrical car makers in 2020. Workhorse (WKHS) has been a prime beneficiary, with shares up by a substantial 645% considering the fact that the turn of the yr.

Portion of investors’ desire in the WKHS story has rested on the company’s opportunity to land a profitable U.S. Postal Assistance agreement.

The USPS is in the procedure of replacing its iconic yet getting old white suitable-hand-push shipping and delivery vehicles and Workhorse is the only deal bidder left featuring an all-electric powered solution. General, 3 corporations are even now in competition for the $6.3 billion 165,000 vehicle award.  

The selection on who the agreement will go to experienced presently been delayed to 4Q20, but now it seems the postal service has delayed the contract’s award even more back – to 1Q21.

Though buyers were naturally still left unhappy by the hold off, Oppenheimer analyst Colin Rusch suggests it does not change his Workhorse thesis.

“We really don’t feel a delay in this announcement modifications the dynamics for WKHS in most likely winning a portion of the company,” the 5-star analyst commented. “As the only US-centered whole EV supplier remaining in the bid, we believe the corporation continues to be very well positioned to earn a sizable portion of the agreement. At the exact time, we believe action amongst prospective buyers of very last-mile shipping automobiles is accelerating and that WKHS could see added shopper wins prior to year-close.”

Workhorse has had source chain issues to contend with lately, typically relevant to shortages at its battery suppliers. As these issues subside, Rusch sees a “solid backdrop for WKHS to ramp non-USPS income.”

Thus, with a WKHS model that “does not suppose any affect from USPS award until eventually 2Q22,” Rusch reiterates an Outperform (i.e. Buy) on the shares. Nonetheless, the analyst expects shares to stay selection sure for the foreseeable potential as indicated by his $23 value focus on. (To look at Rusch’s monitor document, click on right here)

In general, Wall Street is torn when it arrives to whether or not to sing this car firm’s praises or evaluate with an apprehensive gaze, as according to TipRanks, out of 4 analysts, fifty percent are bullish on WKHS inventory while half continue to be sidelined. (See WKHS stock assessment on TipRanks)

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