Shares of electric delivery-van maker Workhorse Group (NASDAQ:WKHS) were trading higher on Monday, after a Wall Street analyst reiterated his buy rating and raised his price target for the stock.
Separately, Workhorse announced that it has received approval to sell its vans as zero-emissions vehicles in California.
As of 1:30 p.m. EDT, Workhorse's shares were up about 9.6% from Friday's closing price.
In a note on Monday morning, Roth Capital analyst Craig Irwin reiterated his previous buy rating on Workhorse's shares and raised his price target for the stock to $27 from $12.
Irwin wrote that he has updated his model and valuation for Workhorse to reflect his judgment that the company should be valued as a market leader.
The key point for auto investors to note, he wrote, is that there are several factors that could drive the company's shares higher, including positioning for its new C-Series electric package-delivery vans, the outlook for a contract from the U.S. Postal Service, and the potential for the company's stake in electric-pickup start-up Lordstown Motors to appreciate significantly.
Add them all up, Irwin said, and Workhorse's stock has "impressive" growth potential.
Separately, Workhorse said on Monday morning that the California Air Resources Board has officially designated its C-Series vans as zero-emission vehicles, meaning that they can be sold as such in the state.
That may seem like a matter of semantics, but investors should take note: That designation is a prerequisite for a California state program in which buyers of certain hybrid- and zero-emission trucks and buses are eligible for monetary incentives. The designation doesn't mean that Workhorse is in, but it's an important step to getting there.
Investors in Workhorse will now be looking ahead to the company's second-quarter earnings report, in which we'll learn more about its plans for production of the C-Series vans. The company said previously that it expects to deliver 300 to 400 of the vans by the end of 2020, and to ramp up production further next year.
Workhorse hasn't yet set a date for its earnings report, but it's likely to happen next month.