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Monday, March 8, 2021

Workhorse Group Inc. could charge higher if Powell pulls paradigm shift

  • NASDAQ: WKHS has been on the rise but remains shy of the all-time highs.
  • Concerns about the firm’s revenues have prevented further gains.
  • Fed Chair Powell’s speech could lift all boats, especially those with longer-term prospects like Workhorse. 

Balance sheet reality or promises for a bright future? That conundrum has been rocking and rolling Workhorse Group Inc’s stock – it is set to edge lower on Wednesday after surging by over 10% on Tuesday. 

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The Loveland, Ohio-based electric vehicle maker is struggling with sales – a mere $92,000 in the last quarterly report – and consequently with profit. A loss of $133 million seems and a minuscule income keeps investors skeptical about the near $2 billion valuation.

On the other hand, Workhorse is operating in a sector that is growing fast – and its stake at Lordstown Motors may provide a considerable financial boost. Lordstown is making electric delivery vans that may come in demand from the US Postal Service – and amid growing demand for deliveries in coronavirus times.

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What’s next?

Workhorse Group Stock Forecast

The next short-term move depends on a long-term shift in the central bank’s thinking. Jerome Powell, Chairman of the Federal Reserve, is set to deliver a speech described as “consequential.” The world’s most powerful banker may change the way the Fed approaches price rises, adopting a policy called Average Inflation Targeting (AIT).

That means allowing for prices to heat up in order to compensate for past low inflation. For policy, that results in lower interest rates for far longer. Prospects of lower borrowing costs mean companies that may see substantial income only within several years may become more attractive now – and Workhorse Group Inc. may be one of them.

Will Powell provide that power play? Will NASDAQ: WKHS resume its gains and test the 52-week high of $22.90? That will be clear on Thursday, just before markets open, but speculation is rife already beforehand. 

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