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News about Nikola could “generally turn positive” next year, according to JP Morgan analyst Paul Coster.
Nikola’s kindness
Nikola, full of scandal, has to turn the corner.
This year,
Nikola
(ticker: NLA), a manufacturer of hydrogen fuel cell trucks, has partnered with
General engines
(GM) has cut back, shaken up allegations of counterfeiting its technology, and endured the abrupt resignation of Trevor Milton, its founder and chief executive.
Just last week, a waste carrier
Republic services
(RSG) canceled an order for 2,500 trucks.
The drama surrounding “Tesla of Trucking” is set to end in 2021 as Nikola launches real work trucks and other evidence that its technology is working, according to JP Morgan analyst Paul Coster.
Nikola shares are in a wild race since the public debut in June, when it reached a 52-week high of $ 93.99. Nikola shares have since fallen to about $ 14. The stock is up sharply on Monday, jumping more than 9% on early trading. They managed to earn 42% this year, compared to the gain of 15% of
The S&P 500 index.
Coster wrote in a note Monday that he expects news of Nikola to “generally become positive,” as he reduced his target price to $ 35 from $ 40 to “reflect the risk of foreclosure associated with a stained mark.” .
The analyst says Nikola “removed the house” before the end of the year, down 50% in the last month after the cancellation of partnerships with GM and Republic.
Coster said the partnerships were rushed by founder Nikola Milton and have hired resources for non-strategic initiatives.
However, it was an impetus for Nikola to gain support from GM, which intended to take a stake in the capital and contribute to the construction of its electric van.
Just days after GM’s partnership was announced this fall, short sales analyst Hindenburg Research issued a report alleging that Nikola was faking technology, citing a 2016 video showing a Nikola truck running on a hill (but not under power). Nikola denied the allegations. Milton left after that, and GM’s partnership was reduced in November.
However, Nikola has made some progress on other fronts. This month, it reached an agreement with the Arizona Public Service to block the power it needs for a planned power grid.
In addition, says Coster, two of his Nikola Tre electric semi-trucks are now in Arizona, and two more are scheduled for delivery in January. Nikola could have nine trucks to test by the end of the first quarter and the commercial availability of Tre by the end of 2021.
“We expect Nikola to post a video with a functional Tre in January,” Coster said in his note, maintaining an overweight rating on the stock. “We are looking for a steady stream of truck updates in 2021.
“We expect less drama in 2021.”
Write to Liz Moyer at [email protected]