What happened

Shares of electric-truck start-up Nikola (NASDAQ:NKLA) were trading higher on Wednesday after a JPMorgan analyst boosted his rating on the company's shares.

As of 10:15 a.m. EDT, Nikola's shares were up about 24.5% from Tuesday's closing price.

So what

In a new note released early on Wednesday, JPMorgan analyst Paul Coster upgraded Nikola's stock to overweight from neutral while maintaining his prior price target of $45.

Coster, who initiated coverage of Nikola with that neutral rating and $45 target just last month, said that the stock's roughly 40% decline since the beginning of July (through Tuesday) has made it more attractive to auto investors with a long-term focus.

Coster sees a number of potential "positive catalysts" over the next several months, possibly including the announcement of a manufacturing partner for the Badger pickup and an accelerated plan to get Nikola's fuel-cell-powered electric semi into production. (To be clear, neither of those things is certain to happen. But if they do, Coster sees them boosting Nikola's share price.)

A silver Nikola Badger, an electric pickup truck.

Nikola is looking to partner with an automaker that can build its Badger electric pickup truck. If and when it finds one, the news could give Nikola's shares a substantial boost, an analyst said on Wednesday. Image source: Nikola.

All that said, Coster reminded investors that this is a "story stock," and the company has yet to show that it can execute on its ambitious business plan. With no revenue expected until late 2021 at the earliest, that's an important caution -- but Coster said that he will be "on board" as long as the company executes to plan.

Now what

Investors should also keep in mind that this is a volatile stock, to say the least. (To give just one example, the stock had already surged well past Coster's $45 target as of 10:15 a.m. on Wednesday.)

I think Coster has the right take. Nikola's story is indeed a compelling one. But given its lack of track record, investors will need to watch carefully as the company works to execute on its aggressive business plan.