Nikola could fall 30% as 'ambitious' profit forecasts and Tesla's first-mover advantage weigh on valuation, CFRA analysts say
Summary List Placement CFRA analysts initiated coverage on electric vehicle maker Nikola with a "sell" rating and a $15 price target late on Monday.
Analyst Garret Nelson said in his note that Nikola could fall nearly 30% from Monday's closing price due to "ambitious" profit forecasts, "significant execution risk", and Tesla's first-mover advantage.
Nelson noted Tesla's dominance in electric vehicles will most likely translate to the commercial trucking segment that Nikola hopes to enter.
The analyst said following the launch of Tesla's semi-truck later this year, that "it will become a preferred supplier to the Class 8 commercial truck market that NKLA intends to target."
In an email to Insider, Nelson said Tesla will be able to "scale production more quickly given its size and cost of capital advantage over competitors" and "commercial customers will be much more comfortable buying these big-ticket vehicles from a proven EV manufacturer."
Also, despite Nikola's estimates for a 20%-25% profit range, CFRA...
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