Shares of Oshkosh (NYSE:) Corp fell significantly, down as much as 7.8% on concerns that President-elect Donald Trump may cancel U.S. Postal Service contracts for electric vehicles. This marks the most significant intraday decline since February 2023.

The potential cancellation comes as Trump’s team is exploring the possibility of terminating USPS contracts with both Oshkosh and Ford (NYSE:), according to sources close to the situation.

Despite the news, Ford shares remained relatively stable in the New York market. Analyst Kyle Menges of Citi commented on the situation, pointing out that while Oshkosh is expected to continue producing modern vehicles for the Postal Service, the likelihood of them being electric has been questioned. Previously, it was expected that about 70% of the modern fleet would be electric vehicles.

Menges provided estimates of the financial impact, suggesting that if the electric vehicle (EV) portion of the deal is completely removed, Oshkosh could see earnings per share (EPS) decline by 50 to 60 cents in 2026 and 2027.

Despite Oshkosh’s stock price plummeting on Friday, Menges characterized the market’s reaction as excessive and not fully reflecting potential earnings per share in the face of headwinds.

Maintaining a positive outlook on Oshkosh, Menges maintained a buy rating on the company’s shares, setting a price target of $125. This comment comes as Oshkosh shares have seen a 2% decline for the year.

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