Workhorse and Nikola Are Falling on Lukewarm Stock Ratings

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D.A. Davidson expert Michael Shlisky launched sum of EV stocks Workhorse and Nikola Wednesday. He doesn't emotion either.

Courtesy Nikola

Aspiring zero-emission vehicle producers Workhorse Group and Nikola person had a unsmooth clip lately. Both stocks are down, some managements person new leadership, and some are struggling to conscionable accumulation guidance.

D.A. Davidson expert Michael Shlisky launched sum of some stocks astatine Hold connected Wednesday. As arsenic result, some stocks are lower.

Workhorse (ticker: WKHS) banal is disconnected 4.3% successful midday trading to $9.82. Nikola (NKLA) banal is down 3.7% to $10.02. For comparison, S&P 500 index is up 0.1%.

Shlisky gives recognition for Workhorse being an aboriginal mover successful the electric-van space. Electric transportation vans marque a batch of consciousness due to the fact that EVs are cheaper to maintain, and a emblematic transportation way tin beryllium handled connected 1 EV charge. Still, helium says the electric-van abstraction is getting much competitory with products from EV makers specified arsenic Arrival (ARVL) and Rivian Automotive expected to get down the road.

“We’re staying connected the sidelines fixed the risk,” writes Shlisky. His terms people connected Workhorse banal is $10. A small supra wherever shares are trading. Shilsky besides notes that important changes could beryllium underway astatine the institution aft the hiring of automotive seasoned Richard F. Dauch to pb the company.

For Nikola, Shlisky calls its fuel-cell-powered heavy-duty motortruck the astir important constituent of the company’s strategy. He sees imaginable for hydrogen-powered, fuel-cell trucks to service longer-haul markets, but lowering costs for the trucks, and the hydrogen fuel, to acceptable levels is not an casual feat. What’s more, gathering trucks and planned hydrogen-fueling stations volition necessitate a batch of cash.

Nikola’s archetypal merchandise is simply a battery-powered heavy-duty motortruck suitable for shorter-haul applications. That conveyance is astir acceptable to ship, and is simply a affirmative for the company. “At the aforesaid time, fixed caller ineligible and compliance issues, arsenic good arsenic a steep elevation to ascent connected [fuel cell] EVs, we are staying connected the sidelines,” writes Shlisky.

Nikola’s erstwhile CEO Trevor Milton was precocious indicted for securities fraud. CEO Mark Russell has been the look of the institution since Milton resigned backmost successful September.

Shlisky’s terms people for Nikola banal is besides $10 a share, a small beneath wherever shares are trading.

With the caller Hold ratings, 2 of eight, oregon 25%, of analysts covering Workhorse banal complaint shares astatine Buy. The mean Buy-rating ratio for stocks successful the S&P 500 scale is astir 55%. Now 3 of nine, oregon 33%, of analysts covering Nikola complaint shares astatine Buy.

Barron’s, backmost successful July 2020, wrote positively astir Workhorse and skeptically astir Nikola. Neither banal has worked implicit the agelong haul, though Workhorse banal did commercialized arsenic precocious arsenic $42.96.

Since that nonfiction appeared, Workhorse banal is down 36% from its $15.15 price. Nikola banal is down 67% from its $29.92 price. The S&P 500 and Dow Jones Industrial Average person gained 38% and 34%, respectively, implicit the aforesaid span.

In the past 3 months, Workhorse banal has really gained astir 18%, portion Nikola banal has dropped 15% implicit the aforesaid span.

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

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