Shares of Nikola Corp. charged higher Monday, after the electric-vehicle maker announced a deal to sell trucks to J.B. Hunt Transport Services Inc.
Also providing a boost Nikola’s stock
NKLA,
D.A. Davidson analyst Michael Shlisky tripled his price target ahead of the quarterly report due out later this week.
Nikola’s stock shot up 7.5% in premarket trading. That put it on track to open about 354% above the record-low close of 54 cents hit on June 6.
The company said that it will sell 13 Class 8 trucks to J.B. Hunt subsidiary J.B. Hunt Transport Inc., with the first deliveries expected in August 2023. The order includes 10 battery-electric trucks and three hydrogen fuel cell electric trucks. Financial terms were not disclosed.
Nikola’s hydrogen arm, HYLA, will supply the hydrogen and fueling infrastructure.
“It’s important for us to be at the forefront of new technologies and innovative solutions that have the potential to change the way we move freight,” said J.B. Hunt Chief Operating Officer Nick Hobbs.
The deal with J.B. Hunt comes a couple of weeks after Nikola said it made a deal with BayoTech Inc. to sell up to 50 big-rig hydrogen fuel cell electric trucks.
Separately, D.A. Davidson’s Shlisky reiterated the neutral rating he’s had on Nikola for at least the past two years, but raised his stock price target to $3 from $1.
Shlisky said he expects “little drama” with respect to deliveries, when Nikola reports second-quarter results before Friday’s open, as the company has already announced that it shipped 45 battery-electric trucks during the quarter and sold 66 trucks at retail.
The company also made announcements regarding a plan to cut cash usage, which included job cuts, and to build out its hydrogen infrastructure.
Shlisky said, “It was good to hear that [Nikola] was targeting reduced cash burn in 2024,” and that it has found partners for some of its hydrogen initiatives, he believes the company “will still have to raise a significant amount of capital in the quarters ahead to fund its operations.”
“There’s a lot to like here,” Shlisky wrote in a note to clients, but the balance-sheet risks keep him at neutral on the stock.”
Nikola shares have soared 156.4% over the past three months through Friday, to put it up 5.1% year to date. In comparison, the Global X Autonomous and Electric Vehicles exchange-traded fund
DRIV,
has run up 38.6% this year and the S&P 500 index
SPX,
has advanced 19.3%.
Read the full article here
