On the date of publication Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article.Ĭhris Markoch is a freelance financial copywriter who has been covering the market for seven years. Investors would be wise to let it find one before placing a speculative bet. However, other analysts have not issued new price targets since the USPS news. WKHS stock is currently sitting around $14. Irwin lowered his price target as well, but only to $15.
Workhorse group usps full#
In fairness, that was a question even if they had been awarded the contract, but it would have given them a full order book and leverage with suppliers.
In an interview with Barron’s, Roth Capital analyst Craig Irwin said the USPS contract “would have differentiated them from the pack.” Irwin noted that this will make it much harder for Workhorse to scale the business. And perhaps if Workhorse receives even a glimmer of hope from the USPS, it can get a bounce.īut this is a tough blow for the company. At some point, it may become attractive enough to speculate on. The knife has continued to fall since that article. In late February, Mark Hake described WKHS stock as a “falling knife”. If it wants the federal government fleet to go electric, there has to be an infrastructure to support that. So while I imagine the Biden administration may not be happy that the only company that proposed an all-electric solution was not awarded the bid, it may cause the administration to recalibrate its plan. There would be no way that an agency as financially strapped as the USPS would have such an infrastructure in place. Companies such as UPS (NYSE: UPS) have already invested millions of dollars into supporting an electric fleet. The USPS decision highlights the fact that for companies to begin accepting electric vehicles they have to have a charging infrastructure in place. Nevertheless, that is what many assumed since the decision caught many analysts flat-footed. Specifically, did the bidding process specify that USPS couldn’t source internal combustion vehicles? Since Workhorse was the only company with an all-electric proposal, that seems unlikely.
Workhorse’s appeal to the USPS is likely to hinge on the details of the bidding process itself. The parameters of the bidding process were likely established long before that. However, DeJoy just assumed the reins in June. That would make sense since Ryan represents the district where Workhorse is located. Ohio Congressman Tim Ryan is calling into question the judgment of United States Postmaster General Louis DeJoy.
This would go against President Joe Biden’s administration’s initiative to electrify the federal government fleet. Second, at least initially, Oshkosh will provide traditional internal combustion vehicles. That wouldn’t be the preferred outcome, but it would be better than nothing. First, there was always speculation that the contract might be awarded to multiple vendors. However, Workhorse seems to have two potential lifelines. There’s little chance that the USPS will reverse its decision to give the contract to Oshkosh (NYSE: OSK). Workhorse has approached the USPS to ask for an explanation of their decision. It wasn’t that all of Workhorse’s eggs were in that basket just the ones that were most ready to hatch. Workhorse has yet to scale its operations, but a contract to produce approximately 160,000 trucks for the USPS would ease investors’ concerns.
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