Analyst revises NIO stock price target

Chinese electric vehicle pioneer NIO Inc. (NYSE: NIO) has seen mixed results this year. At press time, NIO shares are trading at $5.83. 

Although prices are down 30.77% on a year-to-date (YTD) basis, NIO stock is on a sharp upswing, having rallied by 8.63% on the daily chart to bring weekly gains up to 12.24%.

The launch of the company’s Onvo brand L60 model, a competitor to Tesla’s (NASDAQ: TSLA) Model Y, as well as near record-breaking delivery numbers in September, coupled with a $470 million strategic investment, saw stock prices surge by 5.78% in a day. 

However, like most Chinese stocks, after a record-breaking surge in late September, which saw prices go parabolic and major indices gain as much as 22% in a single day, underwhelming measures from Chinese authorities caused a severe pullback.

Now, just a little over a month away from the company’s Q3 2024 earnings call on December 3, a revised analyst price target has reignited hopes that the medium-tier automaker could outperform the wider market and the sector going forward.

Equity researchers see strong upside for NIO

On October 28, Eugene Hsiao, the head of Chinese equity strategy for the automotive sector at the Macquarie Group, upgraded NIO stock from a ‘Neutral’ rating to an ‘Outperform’ rating, with a price target of $6.60. Compared with prices at press time, this represents a 13.20% upside.

The equity researcher sees the aforementioned Onvo L60 model as a key growth driver, anticipating increased sales volume, as well as strong guidance for 2025. Additionally, Hsiao cited the upcoming release of the automaker’s Firefly brand, slated for the beginning of 2025, as a potential turning point for the stock’s fortunes.

As an additional bullish catalyst, on October 5, the company announced a joint venture with one of its major investors, Abu Dhabi-based CYVN Holdings, aimed at expanding into the MENA market.

Hsiao’s bullish outlook is far from a fringe opinion — JPMorgan (NYSE: JPM) researcher Nick Lai also upgraded the stock to an ‘Overweight’ rating on September 6, setting an even higher price target at $8 — which would equate to a 36.87% upside.

At press time, the stock is a consensus ‘Strong Buy’ per Wall Street — out of the 34 analysts who track the EV company’s stock and issue ratings for it, 17 rate it a ‘Strong Buy’, 5 rate it a ‘Buy’, 11 rate it a ‘Hold’, and only 1 rates it a ‘Strong Sell’. The average price target at the time of publication is $6.81 — for a 14.03% upside.

Although the earnings release will give investors a much clearer picture of NIO’s long-term growth prospects going forward, for now, it seems like Wall Street is quite optimistic that the company’s expansion efforts, sales figures, and competitive pricing are enough to warrant a long position — even accounting for potential tariff issues in the critical EU and U.S. markets.

Featured image:
Golmer, Tatjana, Kittyfly — February 13, 2024. Digital Image. Shutterstock