Electric vehicle maker Nikola (NASDAQ:NKLA) shot up 19.2% yesterday amid better than double normal volume, a development mostly connected to a new analyst stepping in with coverage. The company held onto those gains going into trading today, and has even added further momentum as of this writing. The company's first quarter results offered some reason for optimism for those looking to invest with Nikola, though the overall picture from analysts continues to urge caution going forward.
New Analysis Fuels Optimism At Nikola Corporation
The latest report emerging on Nikola comes from BTIG Research, who initiated coverage on the company just yesterday with a “buy” rating and a price target of $18 per share. Reports note that the $18 price target is the result of revenue estimates for 2025 and the EV / sales multiple of nine. Given that Nikola closed yesterday at $15.49, adding nearly 20% by the end of trading, that's still a fairly optimistic outlook.
In releasing its analysis, BTIG referred to Nikola as a “future truck market disruptor,” noting that the company's Tre truck is set to roll out this year. While this will be a comparatively small rollout, reports note—BTIG's Gregory Lewis noted that he only expected a scant few Tre deliveries to actually hit before Nikola ends up facing normal vehicle rollout challenges—but that's expected to change before 2022 concludes. In fact, Lewis also noted that a hydrogen model was likely to hit by 2024, which could by itself be a potential game-changer.
Lewis offered further update on his assessment, noting that it was better that Nikola “...(get) the trucks right” than focus on “hard delivery timelines.” Essentially, Lewis asserted that it's better that Nikola put out a quality product rather than focus on meeting deadlines.
Interestingly, Nikola's gains come at a time when much of the electric vehicle market is seeing some upticks. Nikola's strong trading day yesterday was preceded by smaller gains on Wednesday, and Wednesday also featured gains from rivals like Lordstown Motors (NASDAQ:RIDE) and Workhorse Group (NASDAQ:WKHS).
What Are Financial Analysts Saying About NKLA Stock?
Nikola stock right now has been seeing quite a bit of gain, and BTIG Research is looking for more to follow. However, for much of the last year—since July 2020—our latest research notes the financial analyst consensus rating on Nikola stock is a “hold”, suggesting that the Nikola stock forecast isn't as bright as BTIG hopes. However, there are signs of increasing bullishness coming in for Nikola which suggest a return to a “buy” rating isn't out of line.
Back in August of last year, the company had one “buy” rating and four “hold” ratings to its credit. Six months ago that improved slightly, to two “buy” and four “hold”. Currently, the stock sits at four “buy” ratings and six “hold”, which means all it will really take is another “buy” rating or two or a “hold” rating or two departing the field to bring Nikola back up to a “buy” once more.
Nikola price targets, meanwhile, suggest quite a bit of upside potential. The current average is $29.75, bookended by a low of $13 and a high of $79. With Nikola currently trading close to the low, the chances of higher prices improves.
Recent activity has been somewhat more pessimistic. While BTIG is clearly optimistic, just 10 days prior, Deutsche Bank Aktiengesellschaft lowered its price target from $19 to $16. Around a month before Deutsche Bank's reduction, Wedbush lowered its own target to that new low, cutting the target in half from $25 to $13. The current high of $79, meanwhile, can be traced all the way back to June 2020, when Cowen issued it along with a rating of “outperform” when it initiated coverage.
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