TuSimple Holdings (NASDAQ:TSP) stock’s trajectory looks less than promising to Bank of America as the termination of a Joint Development Agreement with Navistar clouds earnings forecasts for the autonomous truck company.
On Tuesday evening the company announced a mutual agreement to discontinue co-development under a 2020 Joint Development Agreement with Navistar. The rationale for the severing of ties was cited as the company’s recent executive drama that has included multiple CEO transitions in a matter of weeks, battles between executives and the board, as well as criminal and civil investigations into the company.
Amid the noise and ended relationship with Navistar, Bank of America reiterated a Sell-equivalent rating and cut its price target to $1 from a prior $2.50.
“Our [price target] is below TSP’s net cash per share ($4+) given its ~$300 mil annual cash burn and its founders’ supervoting shares preventing unlock of value,” a note to clients on Wednesday explained. “The loss of its manufacturing partner puts its ability to earn revenues in question, which is an overhang that may be unresolved in the near-term given TSP’s governance issues.”
Dig into Wall Street ratings on the stock.