JPMorgan analyst Ryan Brinkman raised the firm's price target on General Motors (GM) to $37 from $35 and reiterates an Overweight rating on the shares after the company announced an alliance with Nikola (NKLA).
The stock closed Tuesday up 8% to $32.38.
The deal will see GM engineer and contract manufacture a pickup truck for Nikola, supply two different variants of the truck with batteries and hydrogen fuel cells, and separately become the exclusive provider outside of Europe of hydrogen fuel cells for Nikola's core Class 7/8 long-haul commercial trucks, Brinkman tells investors in a research note.
The deal is "great" for GM because it entails no up-front cash outlay and an 11% equity stake in Nikola valued at $2.4B based upon Tuesday's closing prices, says the analyst.
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