Workhorse Group (WKHS) PT Raised to $22 at Maxim Group; In Drivers Seat for $5B USPS Procurement
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(Updated - September 19, 2016 9:41 AM EDT)
Maxim Group reiterated a Buy rating and raised its price target on Workhorse Group (NASDAQ: WKHS) to $22.00 (from $15.00) after partner VT Hackney was selected as one of six vendors to prototype trucks for the U.S. Postal Service. Analyst Brian Kinstlinger believes WKHS should be in the driver's seat to win the more than $5 billion USPS procurement.
"With the USPS losing billions annually, we believe an electric truck offers tremendous long-term savings," Kinstlinger commented. "WKHS is the only company that has fully electric trucks in operation. The company also has an electric truck with a BMW range extender that will meet USPS's requirements, in our opinion. In fact a cost savings analysis by UPS suggests a cost savings of about $150,000 over the 20-year life of a truck. We believe this is important, as the USPS fleet is around 40 years old on average and the WKHS trucks will have less wear and tear. The main cost savings is the limited maintenance required for an E-GEN."
In addition, the analyst noted UPS recently made a follow-on order for 200 additional trucks, which suggests the first 100-125 deployed have performed as well as advertised. WKHS released an 8-K that stated it received an E-GEN order, and they believe it was UPS because no other customer has gone through enough testing to make a purchase that large. Also, they do not believe any other truck maker has a similar electric truck.
Shares closed at $8.91 on Friday.
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