Oshkosh stock dips on potential USPS contract changes

Shares of Oshkosh (NYSE:) Corp experienced a significant drop, plunging as much as 7.8% amid concerns that President-elect Donald Trump may cancel the US Postal Service’s contracts for electric vehicles. This marks the most substantial intraday decline since February 2023.

The potential cancellation arises from Trump’s team exploring options to terminate USPS agreements with both Oshkosh and Ford (NYSE:), according to sources close to the situation.

Despite the news, Ford’s shares remained relatively stable in the New York market. Analyst Kyle Menges from Citi weighed in on the situation, indicating that while Oshkosh is anticipated to continue producing new vehicles for the postal service, the likelihood of these being electric has come into question. Previously, it was expected that around 70% of the new fleet would be electric.

Menges provided an estimate on the financial impact, suggesting that if the electric vehicle (EV) portion of the contract is entirely removed, Oshkosh could see a reduction in earnings per share (EPS) by 50 to 60 cents for the years 2026 and 2027.

Despite the sharp decline in Oshkosh’s share price on Friday, Menges described the market’s reaction as excessive and not entirely reflective of the potential earnings per share headwind.

Maintaining a positive outlook on Oshkosh, Menges reaffirmed a buy rating for the company’s stock with a price target of $125. This commentary comes at a time when Oshkosh shares have seen a 2% decline over the course of the year.

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