Buy Nikola ahead of its first ever quarterly report, says Deutsche Bank

Published Mon, Aug 3 20203:00 PM EDTUpdated Mon, Aug 3 20204:08 PM EDT

(This story is for CNBC PRO subscribers only.) Nikola is set to report earnings on Tuesday after the bell, and Deutsche Bank said the stock looks attractive ahead of the report. On Monday the firm issued a short-term catalyst call buy rating on Nikola, while maintaining its long-term hold rating. Tuesday's earnings release will be the first for the electric vehicle company, which went public through a reverse merger with special purpose acquisition company VectoIQ in June. Deustche Bank analyst Emmanuel Rosner said the company could use its earnings call to provide updates on issues including manufacturing partners for the company's Badger pick-up truck, as well an update on a commercial partner for Nikola's hydrogen stations. "Management has indicated it would disclose these sometime in H2, and we believe it would be positively received by investors," Rosner wrote in a note to clients. Right after Nikola went public investors piled into the company, sending shares from around $33 on June 4, all the way up to $93.99 on June 9. But since then some of the investor enthusiasm has cooled, and the stock closed at $30 on Friday. Selling was especially heavy on July 20 after the Securities and Exchange Commission approved registration of more than 77 million shares related to warrant holders and early investors in the stock. Nikola closed the day more than 20% lower as investors locked in gains from the stock's run higher. At the time, Deutsche Bank issued a note saying that if selling pressure were to continue, there could ultimately be an attractive entry point for investors. And with the stock down nearly 40% since, Rosner said that time has come. "This new supply of shares seems to have now been largely absorbed and the stock price has stabilized," he said on Monday. Still, the firm maintained its neutral rating on Nikola, saying investors aren't pricing in the risk as more and more companies enter the electric vehicle space. "Nikola hasn't produced any truck so far, and its factory isn't built yet, leaving large execution risk," Rosner said when he initiated coverage on the stock on July 16 . "And several other electric trucks coming from well-established commercial vehicle manufacturers and electric vehicle players, which creates some competition risk." Shares of Nikola gained 21.63% on Monday. - CNBC's Michael Bloom contributed reporting.

Nikola Motor Company Badger pickup truck

Source: Nikola Motor Company

(This story is for CNBC PRO subscribers only.)

Nikola is set to report earnings on Tuesday after the bell, and Deutsche Bank said the stock looks attractive ahead of the report.

On Monday the firm issued a short-term catalyst call buy rating on Nikola, while maintaining its long-term hold rating.