Outright cancellation of Oshkosh USPS contract highly unlikely, says Baird

Baird reiterated an Outperform rating and $160 price target on Oshkosh (OSK) after news broke that the Trump transition team is considering the cancellation of the USPS contract to electrify its delivery fleet. While the headlines sent an initial shock, it is important to remember that the company is already producing both ICE and battery-electric vehicles under an existing contract, the analyst tells investors in a research note. The firm added that while mix might shift, outright cancellation of the program is highly unlikely while a mix shift by itself would not significantly alter the earning profile.