Nikola Stock Bounces as Wall Street Cuts Its Price Targets

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A Nikola electrical motortruck cab.

Courtesy Nikola

Wall Street terms targets are coming successful connected Nikola banal pursuing the company’s 2nd 4th earnings report—just arsenic the banal is jumping aft a hard week.

Nikola shares (ticker: NKLA) are up 6.7%, astatine $10.90, successful caller trading. Shares are inactive down astir 23% since July 28, earlier erstwhile CEO Trevor Milton was charged by the Justice Department with securities fraud and earlier the institution reported 2nd 4th net Tuesday morning.

Shares closed down 9.7% Tuesday pursuing the report, adjacent arsenic the institution reported a smaller adjusted nonaccomplishment than Wall Street expected.

“Nikola delivered its 2Q results which showed tighter outgo controls than the Street was anticipating,” wrote Wedbush expert Dan Ives successful a Wednesday report. That’s a bully thing. Still, helium says “clear challenges remain,” and helium chopped his terms people for Nikola shares to $10 from $13.

Ives rates shares Hold. So does J.P. Morgan expert Bill Peterson. He chopped his terms people to $21 a stock from $30.


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Peterson addressed the suit against Milton successful his Tuesday probe report, calling it a distraction that mightiness effect successful a good for the company. That isn’t wherefore helium chopped his target, though. He cited accumulation delays owed to factors similar the planetary semiconductor shortage hampering car accumulation everywhere. The supply-chain issues caused the institution to trim 2021 transportation guidance to 25 to 50 vehicles from anterior guidance of 50 to 100 vehicles.

Overall, the mean Wall Street analyst terms target connected Nikola dipped to $17 from $18.14 earlier the second-quarter net report. There were nary upgrades oregon downgrades of Nikola stock. Three of eight, oregon astir 38%, of analysts covering the institution complaint shares Buy. The average Buy-rating ratio for stocks successful the S&P 500 is astir 55%.

Analyst notes chiefly focused connected concern execution, but the suit against the erstwhile CEO remains the elephant successful the room. It was addressed connected the league call, but absorption didn’t accidental much. “There’s tons of imaginable distractions retired there, and our occupation is to support everybody focused connected delivering connected the milestones that we conscionable overviewed for you,” said CEO Mark Russell connected the league call.

Niklola banal is down 29% twelvemonth to date, trailing the 17% and 14% comparable respective gains of the S&P 500 and Dow Jones Industrial Average.

Write to Al Root astatine allen.root@dowjones.com

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