Loop Capital Starts Nikola Corp. (NKLA) at Buy, $35 PT

(Updated - November 19, 2020 4:19 PM EST)

(updating comment)

Loop Capital analyst Jeff Kauffman initiates coverage on Nikola Corp. (NASDAQ: NKLA) with a Buy rating and a price target of $35.00.

The analyst comments "In our view, it is not a question of if we see a conversion from diesel internal combustion engine (ICE) technology toward zero emissions vehicle (ZEV) solutions over the next decade – it is a question of how quickly adoption occurs, and which solutions take what share of the market. It is also not a question, in our view, whether-or-not Nikola participates in that revolution. It is a question of to what degree. While we agree with critics that management may have over-hyped its capabilities following its public markets debut, we are also of the view that Nikola possesses intellectual property that is attractive to a number of partners, and that its vehicles will begin to hit the road with these partners over the next two years. Management continues to make progress on its key milestones. In addition, we believe the company may possess a potential early mover advantage in the longer-haul Hydrogen Fuel Cell (FCEV) truck markets. With the shares having retreated to current levels following a series of negative publicity events, we believe the risk/reward is better balanced at these levels for new investors."

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