Commercial electric-van maker
has a new Buy rating from Oppenheimer analyst Colin Rusch. He calls the company a leader in last-mile delivery solutions and established a new $23 price target for shares, up about 25% from recent levels.
Now four of five analysts covering Workhorse (ticker: WKHS) rate shares a Buy. The average Buy-rating ratio for stock in the
Dow Jones Industrial Average
is about 55%. What’s more, the Buy-rating ratio for
stock (TSLA) is 16%. Two out of five analysts covering electric heavy-duty-truck maker
(NKLA) rate its shares Buy.
Workhorse is becoming Wall Street’s favorite EV stock. That hasn’t stopped it from falling nearly 7%, to $17.60, in recent trading. That isn’t typical following an upgrade or a new Buy rating, but shares are still up about 7% for the week.
Workhorse doesn’t directly compete with either Nikola or Tesla. It’s all about delivery vans. The company just started delivering its C-series electric delivery vans to customers, but Workhorse has been working on the vehicles for years.
“With 5 [million] miles driven, Workhorse is far and away the leading platform from a miles-driven perspective for last-mile EVs,” wrote Rusch in his report. “We believe their vehicles serve an [$18 billion] U.S. market in which consumers are not willing to compromise on service.”
Electric vehicles make a lot of sense in commercial applications with a lot of stop/start driving and when vehicles can be recharged in a central location at night. What’s more, when commercial vehicles are driven more than personal cars, the energy savings pile up more quickly. Electricity to charge the batteries typically costs less than the equivalent amount of gasoline.
In additional to EV adoption by commercial fleet operators, Rusch identified several catalysts that could help the stock over the near term. Workhorse is bidding on U.S. Postal Service business to replace some of its vehicles—those white, right-hand drive mail-delivery trucks. The company also owns a stake in Lordstown Motor, which will be publicly traded by merging with a special-purpose acquisition company,
(DPHC). Lordstown is launching a light-duty pickup truck called Endurance.
The SPAC transaction might unlock some value—Workhorse owns 10% of Lordstown. It will, at least, provide liquidity. Workhorse announced a partnership with
(6501.Japan) Monday, boosting shares by double-digit percentages both Monday and Tuesday.
Rusch, for his part, covers a lot of alternative-energy and transportation names, including
Westport Fuel Systems
(WPRT). He rates those stocks Buy as well. Overall, he covers 25 names.
The entire EV sector is taking a pause Thursday. The EV behemoth Tesla, which amounts to more than 80% of total EV maker market capitalization, is down 8.4% in recent trading. Shares have been on a tear lately, up more than 40% over the past month.
The recent declines for Tesla appear to have been catalyzed by longtime holder Baillie Gifford selling stock. Gifford said it was a portfolio-rebalancing action taken because Tesla was becoming too large a portion of its overall portfolio.
Tesla stock, after all, is up almost 400% year to date, crushing comparable returns of the
and the Dow. Workhorse stock, for its part, has done even better, up more than 500%.
The entire EV sector, in fact, has been on fire. EV stock Barron’s tracks are up about 350% year to date on average. Some, like analysts covering Workhorse, remain hopeful about the EV future, but the recent runup has some investors taking profits.
Write to Al Root at email@example.com