Nikola defended at JPMorgan, GM punished for partnership ties
Sep. 21, 2020 9:18 AM ET|About: Nikola Corporation (NKLA)|By: Clark Schultz, SA News Editor
Just days after saying it had a reassuring talk with Nikola's (NASDAQ: NKLA) CFO, JPMorgan cuts its price target on Nikola to $41 from $45, but keeps the faith with an Overweight rating.
Analyst Paul Coster: "We believe the inbound Chairman, a former GM board member, is probably better suited to the next – execution – phase of the company's development, but Trevor Milton's resignation could weigh on some of the partner and customer relationships he has forged, and employee morale is probably fragile right now, just as the workload is intensifying and competitive threat looms. We increased the discount rate in our PV calculation of stock value by 10% to 22%, but left the business model and forward valuation multiple unchanged, on the assumption that the company will still execute to plan given that most developments to date have slightly exceeded our expectations, that is with the exception of Mr. Milton's social media and marketing missteps."
Shares of Nikola are down 26.88% premarket to $25.00. Meanwhile, General Motors (NYSE: GM) is off 4.25% to bleed off its recent gains with its Nikola partnership looking different over the last week. The drop for GM is bigger than what its Detroit are seeing in the early session. |
