What happened
Actions to start up electric trucks Nikola (NASDAQ: NKLA) They were trading lower for the second day on Friday morning, after an analyst at Deutsche Bank spoke about the company’s future prospects, but did not recommend that investors buy its shares.
As of noon EDT, Nikola shares fell 3.5% from Thursday’s closing price.
And that
Deutsche Bank analyst Emmanuel Rosner kicked off Nikola hedging in a note Thursday with a hold rating and a target price of $ 54, slightly below the share’s closing price ($ 54.58) on Wednesday.
However, Rosner is not a Nikola bear. He believes the shares offer investors “a pure and rare way to invest in zero-emission commercial trucks,” a sector that is likely to grow strongly in the coming years, and that Nikola could sell more than 15,000 trucks a year by 2025, generating revenue of $ 4.6 billion per year.
Nikola hopes to start shipping its electric semi-trailers by the end of 2021. Image source: Nikola Corporation.
But, he said, there is some reason for caution. While Nikola’s shares are trading at a multi-share business value that is similar to that of Tesla (NASDAQ: TSLA) and NIO (NYSE: NIO)Nikola, unlike NIO and Tesla, has yet to produce any trucks. You won’t even have your factory in operation for at least another year.
At this time, Nikola has no income, and that makes him a risky bet.
Now what
It’s hard to argue with Rosner’s takeout. While Nikola’s story is good, he has not yet shown that he can be executed. At the moment, it’s priced in full for its best probable scenario five years from now, despite the considerable risk of things going wrong between now and 2025. Automotive investors need to exercise some caution here.
