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Nikola also has plans to build driveways with long trainers and a pick-up truck.
Courtesy Nikola
Nikola shares fell Tuesday, following a 22% bounce on Monday following the announcement of an order for 2,500 battery-powered trucks from waste dumps Republic Services.
Investors were hungry for treat of customers, and they got it. Despite the share that returned some of Monday’s gains, Wall Street seems impressed with the deal.
The order validates the company, Deutsche Bank analyst Emmanuel Rosner said in a Tuesday research report. He rates Nikola shares (ticker: NKLA) the equivalent of Hold’s, but put a “short-term catalyst buyout” on the stock exchange just before Nikola reported August 4 earnings.
That call looked shaky in the immediate aftermath of the report. Shares fell nearly 10% —the stake because there was no announcement of new customers for the battery-powered truck. Now the stock is trading roughly $ 7, or 20%, above the rising price when Rosner turned positive in the short term.
Cowen analyst Jeffery Osborne was also impressed with the large order. He pointed out in a Monday research report that founder Trevor Milton used the word “guarantee,” implying that it was a solid assignment. Nikola confirmed that the agreement with Republic is binding.
“Prices of the order were not disclosed, but Mr Milton said the intention was below [$500,000] per truck, which is the hefty price of other solutions for electric garbage trucks, ”Osborne wrote. ‘The higher front costs versus a traditional one [internal combustion engine] garbage truck would then be compensated by lower operation and maintenance costs over the course of the lifetime. ”
Those are two positive pieces of advice from the Nikola Republic deal. There are only two analysts left to ask. Only four cover the company.
RBC analyst Joseph Spak looked at the deal in a quick research report on Monday. JP Morgan analyst Paul Coster wrote that ash factories make sense as an EV brand. “Onion wagons follow pre-defined routes, and the fleet returns to a depot,” Coster wrote. “The trucks are typically deployed in urban / suburban environments, where noise pollution and diesel pollution are a concern.”
Buy Osborne and Coster Shares. Spak and Rosner rate shares Hold.
Four analysts is not a lot. The average company in the Dow Jones Industrial Average has about 30 analysts covering their shares. The average buy rating ratio for shares in the Dow is around 55%.
Since a specialty buying company announced plans to merge with Nikola – that’s how it became a publicly traded entity – shares have risen about 275%, far better than similar gains from the Dow and S&P 500.
Nikola stock was down 1.7%, at $ 44.05 in midday trading Tuesday. The Dow was up 1%.
Republic buys the battery-powered heavy truck in 2021. Anheuser-Busch InBev (BUD) is a leading customer for the 2023 fuel-powered heavy truck. Soon investors are expecting Nikola to announce a production partner for its light-duty pickup called Badger. Timing for the Badger is currently a bit more in the air.
Write to Al Root at [email protected]
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