BARRON’S ROUNDUP: Electric Trucks; Sickle Cell Cure; Fast Food

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The surge of Tesla (TSLA) stock has led to investors to speculate on a Tesla-equivalent in the electric truck space. But competition is stiff and Tesla-like returns may prove elusive. Barron’s examined electric truck stocks in the cover story of its July 27 issue.

Key Takeaways:

  • Nikola (NKLA) has no earnings or sales, and its hydrogen-powered truck won’t be available until 2023. But that hasn’t stopped some analysts from predicting more upside for its stock. If the shares fall under $25, that would be a better entry point for growth investors seeking a margin of safety, Barron’s says. Nikola closed Friday at $29.92.
  • Ballard Power Systems (BLDP)’s stock has been boosted by Wall Street’s renewed enthusiasm for its hydrogen technology. Its fuel cells go mainly into trucks and buses. Despite the rise, five of the eight analysts covering Ballard still rate it Buy, with an average price target around $19. Shares closed Friday at $15.81.
  • Electric-truck maker Workhorse (WKHS) soared about 230% in the past month. The company is bidding to supply vehicles for the U.S. Postal Service. If it wins, along with selling more trucks to the likes of UPS, it could hit a $27 price target, according to a Roth Capital Partners analyst, from around $15 now.
  • Hyliion sells electric motors and drive systems for trucks. Investors can get access to Hyliion through Tortoise Acquisition (SHLL), a SPAC that agreed to merge with the company. If it got 10% of Cummins’ earnings in five to seven years, that would make its stock roughly $34 today, above the SPAC’s last quote of $18.

Other highlights from this week’s magazine:

  • If cures for sickle cell disease are successful it would demonstrate the potential for gene therapy, and boost a number of companies. For Crispr Therapeutics (CRSP), Vertex Pharmaceuticals (VRTX), and Bluebird Bio (BLUE), genetic therapies for sickle cell could fetch annual revenue of several billion dollars apiece, Barron’s says.
  • PG&E (PCG) looks undervalued after exiting bankruptcy. While the shares probably won’t pay dividends until at least 2023, the California utility has clarity on its wildfire liabilities and some downside stock-price protection.
  • McDonald’s (MCD) stock fell during the early stages of the pandemic, but could rebound when earnings arrive next week. Signs point to big improvements for fast-food, with rising demand for drive-through meals and burgers. Earnings could easily top expectations, Barron’s says.

©2020 Bloomberg L.P.

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