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On Monday, JPMorgan released a note stating that they were retaining the $40 price target on Nikola.

On Monday, JPMorgan released a note stating that they were retaining the $40 price target on Nikola, according to MarketsInsider.

Nikola recently revised its deal with General Motors and JPMorgan believes that provides upside for investors over the medium to longer term. The bank maintained its buy rating and $40 price target, emphasizing that any pullback should be viewed as a buying opportunity. On Monday, shares fells as much as 25 percent followed by an almost 15 percent decline on Tuesday.

The sell-off was initiated on the results of the company's long-awaited deal with General Motors. The results were disappointing to investors. GM stated that the new deal did not require them to take a $2 billion equity stake in Nikola, nor partner with the company to produce its Badger pickup truck.

However, Nikola and General Motors decided to focus mainly on Nikola's Class 7 and Class 8 semi-trucks that are powered by fuel cells. The deal "looks like a conventional arms-length cost-plus supply contract for [General Motors'] Hydrotec system," JPMorgan said.

"We think this is a positive outcome for Nikola over the medium to longer term, since the company can now focus on the core Class 8 truck initiative and avoid the distraction and capex associated with the Badger pickup," JPMorgan said.

161 million shares were released from lockup today, allowing executives to sell shares. JPMorgan is staying strong stating that any pullback in Nikola "could be a good buying opportunity."

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