Morgan Stanley says ‘buy’ the stock

NIO (NIO) got off to a good start in 2023, after announcing a record 15,815 deliveries for December 2022, amounting to a 50.8% year-over-year increase.

After the myriad issues encountered last year, namely the zero-Covid policies’ impact on production alongside supply chain snags, investors will be hoping the uptick is a harbinger of things to come and not merely a one-off event.

The December delivery numbers come in the wake of the company’s December 24th NIO Day. At the event, as anticipated, NIO unveiled two new models – the coupe SUV EC7 and the new ES8. Both are based on NIO’s second-gen platform with the newest electric drive system (480kW dual-motor AWD system and SiC power module), AQUILA autonomous driving hardware and second-gen digital cockpit, similar to the ES7 and ET7.

But given the fact most of the initiatives announced at the event won’t reach the market before Q2, Morgan Stanley’s Tim Hsiao believes “volume delivery is likely to be the key driver into the low season.”

Pre-orders for the new models have already started with deliveries for the EC7 slated to kick off in May followed by the new ES8 in June.

The 500kW ultra-fast charging stations and the third-generation power swap station (PSS) were also introduced at the event while “spy shots” of the NIO Phone – anticipated to launch in the spring – were also unveiled.

In total, NIO plans on launching five new models this year, but as of now, only two have been released. “All in all,” Hsiao summed up, “2023 will be another busy year for NIO with multiple product launches.”

So, down to the nitty-gritty, what does this all mean for investors? Hsiao reiterated an Overweight (i.e., Buy) rating, backed by a $16.10 price target, implying room for share growth of 69% over the coming year. (To watch Hsiao’s track record, click here)

Overall, NIO stock has received 13 analyst reviews over the past 3 months and these breakdown into 9 Buys and 4 Holds, all culminating in a Moderate Buy consensus rating. The Street’s average target of $16.14 is practically the same as Hsiao’s. (See NIO stock forecast on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.