Baird initiated coverage on EV maker, Nikola Corporation (NASDAQ:NKLA) with an Outperform rating and set a 12-month price target for the auto stock at $2.00.
“We see significant potential in the market for zero-emissions trucking and believe NKLA has finally found the right management team to capitalize on the opportunity.”
Baird believes that NKLA's unique design and software set it apart from traditional diesel trucks. Analysts at Baird anticipate potential catalysts for both the Truck and Energy businesses, including manufacturing enhancements, customer and partnership announcements, and the development of hydrogen infrastructure.
NKLA's technology enables long-distance travel for electric and fuel cell trucks. They get their powertrains from FPT Industrial (an Iveco Group subsidiary) and design software and components in-house. Previously, they used batteries from Romeo Power, but now they come from a different supplier.
After various changes in leadership, Steve Girsky became the CEO of NKLA in August 2023. Since then, he has been building a new management team, a move viewed positively by analysts. They are optimistic about Girsky's impact on the company so far. Looking ahead, analysts expect NKLA to appoint a CFO soon, a crucial addition to Girsky's team.
In terms of the truck business, analysts highlight customer announcements and production improvements as significant developments to watch. Additionally, analysts see potential benefits from state or federal incentive programs in new locations.
For the hydrogen side of the business, analysts believe the key catalysts are expected to be infrastructure investments, such as hydrogen stations, and partnerships as NKLA works on expanding the fueling network.
Shares of NKLA are up 5.7% in early trading Wednesday morning.