Shares of electric big-rig start-up Nikola (NASDAQ:NKLA) were moving higher on Monday, after a Wall Street analyst said that the stock could jump after the company's earnings report later this week.
As of noon EDT, Nikola's shares were up about 9.7% from Friday's closing price.
In a note on Monday morning, Deutsche Bank analyst Emmanuel Rosner added Nikola to the bank's earnings-related short-term buy list while maintaining a longer-term hold rating on the truck company's shares.
Rosner said that while Nikola doesn't yet any revenue to report, it could use its second-quarter earnings call (tomorrow) to provide auto investors with some business updates. If so, those updates could drive shares higher in the near term, the analyst wrote.
While Rosner doesn't know for sure what Nikola will tell investors, he said that updates on new customers for its battery-electric semi, word of a commercial partner for the hydrogen refueling network it plans to build, or the announcement of a manufacturing partner for Nikola's Badger pickup were examples of the kind of news that could give shares a boost.
Rosner noted that Nikola's share price fell roughly 40% through last Friday from July 20, when the company announced that it expects to issue 23 million new shares over the next few weeks as it redeems warrants given to its early investors. However, Rosner thinks this new supply of shares has largely been absorbed by the market, and the stock price appeared to have stabilized late last week.
Long story short: Rosner thinks there's a 10% to 20% potential upside in Nikola's shares in the near term following its earnings report.
Nikola is scheduled to report its second-quarter results after the market closes tomorrow, Aug. 4.