Nikola stocks have gone through quite a bit of ups and downs since the past few weeks. There has been a decrease in electric truck maker shares after the controversial report that accused Trevor Milton, founder of the company of scamming investors and making false claims.
Upon his resignation from the company, the shares of Nikola further plunged, leaving hundreds wondering if the company would still be able to function stably without its founder, in the coming time.
However, the stocks of Nikola popped up 36%, covering a great amount of the loss that the company had incurred in the previous sessions. Investors were reassured to some extent following the declaration of company’s plan to become a leader in zero-emissions transportation.
Over the coming weeks, Nikola expects to finalize, test and start production shipments of five prototype Nikola Tre BEV trucks at the IVECO JV facility. The testing will be carried out in Germany and the rest of the procedure will be carried out by the end of 2021 as planned.
Furthermore, the partnership of the company with General Motors is also seems to be going as planned. Even though the partnership model by Nikola faced plenty of criticism recently, it has been regarded as a “compelling strategy” by J.P Morgan.
However, according to Coster, the accomplishment of Nikola also depends upon signing a formal deal with GM.
Coster said, “We think the GM partnership deal is the most important near-term catalyst.” He further added, “Failure to consummate the GM deal would be a fatal blow for the Badger initiative, but a serious blow to the more important Truck initiative too, in our view. The fuel station partnership announcement is less important, in our view, though a potential validation of the company that could resonate with investors. Pending completion of the five Nikola Tre trucks could be a boost to credibility, obviously… For now, the GM partnership is a stress-test for the company.”
Coaster believes that Nikola might be able to achieve its goals in the near-term, setting an optimistic price target of $41 and overweight (i.e. Buy) rating. This is one of the main reasons that analysts expect the shares of Nikola to surge 70% further.
There has been a lot of uncertainty regarding Nikola on Wall Street. Whereas, the stock has a hold consensus rating based on 1 sell, and 2 Buy and Holds, each. On the other hand, an increase of 55.5% is anticipated based on the average price target in the next year.