NKLA stock

Is NKLA Stock On The Rebound Following Positive Production News?

To say NKLA stock has been on a wild rollercoaster since going public would be an understatement. NKLA first took investor interest by Storm in 2020 as the wider SPAC market blossomed. However, following its rise to a $65 trading price, the stock has been on a 86% decline. The main element to this was a Hindenburg report which highlighted key flaws to the companies founders claims.

Fast forward a few months and NKLA cut ties with its Founder and CEO Trevor Milton, after being charged with three counts of criminal fraud which is yet to face trial. Nevertheless, the downward slide of NKLA stock may be at a cross road as the company has begun production of its battery-electric commercial truck.

NKLA Stock Gains on Production News

Today, the company announced it has begun production on its battery-electric commercial truck, the Tre. NKLA stock jumped 19% in pre-market trading, pushing the companies monthly trading performance above 30% for the first time since May last year.

Nikola said production began this week at its factory in Coolidge, Arizona. Production marks an important milestone in terms of generating revenues, as the company plans to deliver its first vehicles in the US by Q2 2022 and in the EU by Q3. Based on company forecasts, Nikola expects to deliver 300 to 500 trucks in 2022 alone. 

JP Morgan Says Nikola on Track To Hit its 2022 Goals

Earlier this month JPMorgan analyst Bill Peterson kept a Neutral rating on Nikola with a $10 price target following a meeting with Nikola’s management team. Peterson noted that the company is tracking its 2022 goals and has longer-term opportunities for margin expansion, especially as supply constraints begin to abate.

The analyst added that Nikola is focused on ramping production of its Tre EV Truck as well as looking to achieve lower costs in batteries over time. Lastly, Peterson added that the hydrogen-focused parts of Nikola’s business will be long-term catalysts of value based on range and payload benefits.

NKLA stock

The Bottom Line: Is NKLA Stock Finally Bouncing Back?

While production marks an important milestone, the company will continue to face the ongoing supply constraints the automotive industry is facing. Though, the longer term catalyst of an all EV Truck may attract more business opportunities as the trucking industry faces increasing fuel costs. Based on the most recent analyst forecasts, the 12 month forecast for NKLA stock remains between $10-$15, with Wedbush analyst recently raising their target to $15.

The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

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