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Nikola’s news could “be generally positive” next year, according to JP Morgan analyst Paul Coster.
Courtesy of Nikola
The Nikola scandal has to turn the corner.
This year,
Nikola
(ticker: NLA), a manufacturer of trucks powered by hydrogen fuel cells, has seen a partnership with
General Motors
(GM) shrunk, dismissed allegations of counterfeiting its technology and endured the abrupt resignation of Trevor Milton, its founder and chief executive.
Last week, waste carrier
Services of the Republic
(RSG) canceled an order for 2,500 trucks.
The drama surrounding the “Tesla of Trucking” is set to end in 2021 as Nikola launches real work trucks and other evidence that its technology is feasible, according to JP Morgan analyst Paul Coster.
Nikola’s shares have been on a wild journey since his public debut in June, when he reached a 52-week high of $ 93.99. Nikola’s shares have fallen to around $ 14. Shares rose sharply on Monday, jumping more than 9% in early operations. They have managed to earn 42% this year, compared to 15%
S&P 500 Index.
Coster wrote in a note Monday that he expects news about Nikola to “generally turn positive,” as he lowered his price target from $ 35 to $ 35 to “reflect the risk of execution associated with a dirty brand.” .
The analyst claims that Nikola has “removed the house” before the end of the year, falling 50% last month after the cancellation of partnerships with GM and Republic.
Coster said the partnerships were hastily brought together by Nikola’s founder, Milton, and devoted resources to non-strategic initiatives.
Still, it was a boost for Nikola to win the support of GM, who planned to take a stake in shares and help build his electric van.
A few days after GM’s collaboration was announced this fall, short-selling analyst firm Hindenburg Research released a report alleging that Nikola was counterfeiting its technology, pointing to a 2016 video showing a Nikola truck rolling down a hill (but not under power). Nikola denied the allegations. Milton left later, and the GM partnership was reduced in November.
Still, Nikola has advanced on other fronts. This month he made a deal with the Arizona public service to block the electricity supply he needs for a planned power grid.
In addition, says Coster, two of its Nikola Tre electric semi-vans are already in Arizona and two more are scheduled for delivery in January. Nikola could have nine trucks to test at the end of the first quarter and the commercial availability of the Tre by the end of 2021.
“We expect Nikola to post a video of a Tre in operation in January,” Coster said in his note maintaining an overweight rating in the action. “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 to [email protected]