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Nikola News could ‘become generally positive’ next year, according to JP Corgan analyst Paul Coster.
Thanks to Nikola
The scandal-ridden Nikola must make the turn.
This year,
Nikola
(ticker: NLA), a manufacturer of trucks powered by hydrogen fuel cells, has a partnership with
General Motors
(GM) has scaled back, shaking off accusations of counterfeit technology and enduring the sudden resignation of Trevor Milton, its founder and executive chairman.
Just last week, garbage carrier
Republican Services
(RSG) canceled an order for 2,500 trucks.
The drama surrounding the “Tesla of Trucking” should end in 2021, as Nikola rolls out real trucks and other evidence that its technology is workable, according to JP Morgan analyst Paul Coster.
Nikola shares have been on a wild ride since its 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 strongly on Monday and jumped more than 9% in early trading. They managed to achieve 42% this year, compared to the 15% increase in
S&P 500 Index.
Coster wrote in a note on Monday that he expected the news about Nikola to be ‘generally positive’, as he lowered his price target from $ 40 to $ 35 to ‘reflect the execution risk associated with an affected brand. ‘
The analyst says Nikola ‘cleaned up’ before the end of the year and has fallen by 50% in the past month following the cancellation of partnerships with GM and Republic.
Coster said the partnerships were hastily merged by Nikola founder Milton and linked resources to non-strategic initiatives.
Still, it was a boost for Nikola to win the support of GM, which was planning to take a stock stake and help build its electric pickup.
A few days after the GM partnership was announced this fall, the short-selling analyst firm Hindenburg Research released a report alleging that Nikola had expired its technology, pointing to a 2016 video showing a Nikola truck crashing into a roll down hill (but not under force). ). Nikola denied the allegations. Milton then left, and the GM partnership was cut off in November.
Nevertheless, Nikola has made progress in other areas. This month, he entered into an agreement with the Arizona Public Service Agreement to include the supply of electricity for a planned fuel network.
In addition, Coster says, two of his electric semi-trucks Nikola Tre are now in Arizona, and two more are scheduled for delivery in January. By the end of the first quarter, Nikola could have nine trucks to test and commercial availability of the Tre by the end of 2021.
“We expect Nikola to post a video of a functional Tre in January,” Coster said in his note that he maintains an overweight rating on the stock. “We are looking for a steady stream of updates for the truck in 2021.
“We expect much less drama in 2021.”
Write to Liz Moyer by [email protected]