Nikola stock rallies after Wedbush analyst says it’s no longer a sell

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Nikola stock rallies after Wedbush analyst says it’s no longer a sell


Shares of Nikola Corp. jumped Monday, after Wedbush analyst Dan Ives upgraded the electric vehicle maker, saying the bearish catalysts have already played out.

Ives raised his rating to neutral, after being at underperform since Sept. 23. He boosted his price target by 67%, to $25 from $15.

The stock
NKLA,
-0.39%

climbed 6.1% in premarket trading. It had gained 9.2% since Sept. 23 through Friday — the S&P 500 index
SPX,
-1.93%

has climbed 14.7% over the same time — but has tumbled 71% since it closed at a record of $79.73 on June 9, 2020.

The main concerns about Nikola, Ives said, have been the scaled-back deal with General Motors Co.
GM,
-0.71%
,
the hype surrounding the Badger electric truck, and executions risks after founder Trevor Milton stepped down as Chairman.

“While some clear hurdles remain for Nikola to achieve its hydrogen and semi-truck vision over the next year, we believe most of the negative catalysts we were fearing have now played out in the market with a more balanced risk/reward on the name looking ahead,” Ives wrote in a note to clients.

He said he still believes the company’s EV and hydrogen fuel cell ambitions are attainable, as he expects the green initiatives of the Biden administration and the Democrat-leaning Congress will be “massive” for the EV/hydrogen market in the coming years.

Still, Ives is not yet bullish on Nikola, saying it is now a “prove me” story, with the company laying out a “tight and step-by-step roadmap” that investors can clearly judge success and failure between now and 2023.



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