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Cowen analyst Jeffrey Osborne downgraded Workhorse Group (WKHS) to Market Perform from Outperform with an unchanged price target of $13. The stock closed Thursday up 28% to $14.77.

The shares are fairly valued following the recent rally which is not supported by fundamentals or company-specific catalysts, Osborne tells investors in a research note. The analyst sees Q2 and Q3 being a "critical period of time" for Workhorse as deliveries of the C1000 ramp up while "competitive dynamics intensify." Osborne does not see "major near term catalysts to buoy shares further."

Workhorse has a "solid opportunity" to gain momentum through the remainder of 2021 and into 2022 with its partner network, but the shares are fairly valued following the recent rally of select stocks that are heavily shorted by institutional investors, known as the "meme stock rally," contends the analyst.