The US Postal Service said so awarded the contract to replace the white right-hand drive vans Oshkosh a diversified seller of military and commercial vehicles. The maker of electric vehicles Workhorse bid, but it didn’t win.
Now Workhouse shares are falling.
The award concerns 165,000 vehicles that will be delivered in the coming years. It’s a significant part of the business.
The stock of Workhorse (ticker: WKHS) declined about 47% during Tuesday trading. Stock in Oshkosh (OSK), the winner, finished with 6.1%. The S&P 500 for comparison: 0.1% recovery.
The moves add several hundred million dollars to Oshkosh’s market cap and wiped out more than $ 1 billion in Workhorse’s. The numbers don’t match exactly, but that’s no big surprise. Oshkosh is a larger company with more sources of income. Its market cap is approximately $ 7.5 billion and it has annual sales of nearly $ 8 billion.
Workhorse did not generate any significant turnover in 2020. It tries to break into the growing market for electric commercial vehicles. The USPS news is a setback.
Workhorse was the only all-electric offering among the finalists. The stock was running behind President Joe Biden talked about making the federal fleet fully electric in early January.
The USPS referred Barron’s to the current press release. It says the Oshkosh vehicles will have both gas and electric powertrains, but the number and timing of electrified mail delivery vans are not yet known.
The next focus for investors will be on what analysts have to say about the news. Before the announcement, approximately 57% of Workhorse stock analysts rated the stock on Buy, in line with the average Buy ratio for shares in the Dow Jones Industrial Average Roth Capital analyst Craig Irwin relegated Workhorse stock after the USPS delayed the award decision several times.
Barron’s wrote positive on Workhorse stock back in July, in part because of the USPS opportunity. The stock was about $ 15 when we made that call. They rose as high as nearly $ 43, but are now right back where they were.
After speaking with Irwin, we recommended sell a little as stocks increased sharply at the beginning of the year. That turned out to be a good idea, but Tuesday’s USPS decision still fell Barron’s by surprise.
Write down to Al Root [email protected]
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