JPMorgan cuts Nikola target on elevated risk after Milton resignation

JPMorgan analyst Paul Coster lowered the firm's price target on Nikola to $41 from $45 and keeps an Overweight rating on the shares. The year-end 2021 price target cut reflects the risk associated with the resignation of founder and executive chairman Trevor Milton, Coster tells investors in a research note. The stock in premarket trading is down 27%, or $9.39, to $24.80. Milton's resignation could weigh on some of the partner and customer relationships he has forged, and employee morale "is probably fragile right now, just as the workload is intensifying and competitive threat looms," says the analyst. However, Coster believes inbound chairman Stephen Girsky is "probably better suited" for the next phase of the company's development, which is centered on execution. The analyst still assumes Nikola will execute to its plan, noting that most developments to date have slightly exceeded his expectations, "with the exception of Mr. Milton's social media and marketing missteps."