NKLA - Nikola may fire off capital raise in back of the year - JPMorgan

JPMorgan weighed in on Nikola Corporation ( NASDAQ: NKLA ) with the company's earnings report approaching.

The firm thinks the quarter generally tracked to expectations and expects the prior full-year guidance issued for revenue, margins and shipments to be reiterated.

Analyst Bill Peterson warned a potential capital raise in the back half of the year could be required to fund the company’s 2023 business plan. The raise is seen as necessary in a critical year for NKLA as it looks to build scale in its BEV business and launch its FCEV offering.

"While we could see swift negative stock reaction to a capital raise, we think investors may ultimately view a raise positively as it removes a level of uncertainty in the business."

Peterson and team said they would not be surprised to see significant volatility in shares over the next few years. The firm kept a Neutral rating on NKLA and established a December 2023 price target of $7.50.

Shares of NKLA rose 0.18% premarket on Wednesday to $5.65 vs. the 52-week trading range of $4.43 to $15.56.

The Seeking Alpha Quant Rating on Nikola flipped to Sell from Hold on June 22.

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