Barclays Reiterates Bearish Price Target on Nio Following Q1 Earnings Results
Written by Cláudio Afonso | LinkedIn | X
Barclays analyst Jiong Shao reiterated on Friday the firm’s Underweight rating on Nio shares while maintaining the $4 price target following the first quarter earnings results published last week.
The price target implies a potential downside of 17 percent, based on Friday’s closing stock price of $4.83 per share.
In a new research note, the analyst highlighted concerns over higher-than-expected selling expenses and management’s comments on a continued decline in Q2 selling prices weighed on the shares, as TheFly initially reported.
The firm also expressed concerns about the sustainability of Nio’s recent sales rebound. In early April, Barclays had downgraded Nio’s rating to Underweight from Equal Weight while cutting the price target to $4, down from $5.
Never miss an update
At the time, the analyst evaluated Nio’s sales performance in March as “weaker than expected” adding that Nio‘s troubles in selling its 2024 models can put Barclays’ 2024 consensus estimates at “significant risk.”
“With weaker than expected deliveries in March, Nio’s Q1 deliveries came in in line with revised guidance of 30,000 provided on March 27th but below its original guidance provided on March 5th”, the analyst wrote.
Last week, Morgan Stanley analyst Tim Hsiao reaffirmed the $10 price target on the stock implying an upside potential of 90 percent despite the “worse than expected” net loss reported by the electric vehicle maker.
Earlier today, BofA Securities analyst Ming Hsun Lee raised the price target on Nio shares to $6.00 (from $5.90) while maintaining a Neutral rating.
The company unveiled on Thursday ambitious plans for its upcoming NT3 platform during the Q1 2024 earnings call. The new platform, in which the new flagship sedan Nio ET9 will be built in 2025, aims to achieve a significant milestone: an average of 20 percent vehicle margin.
In the subsequent conference call, founder and CEO William Li revealed that the company is gearing up to enter the UAE market later this year.
Never miss an update
“Regarding our entry into the Middle East market, we are preparing to offer our products and services in the UAE,” the chief executive stated.
The company expects second-quarter vehicle deliveries to range between 54,000 and 56,000 units, anticipating 17,836 to 19,836 vehicles to be delivered in June.
Nio achieved its best monthly result ever in May, delivering 20,544 vehicles. This followed the delivery of 15,620 units in April, bringing the total to 36,154 units for the first two months of the second quarter.
The figures from the month of May represent a year on year increase of 233.8 percent as the EV maker delivered 6,155 a year ago. The last time the company delivered more than 20 thousand units was in July last year when it registered 20,462 vehicles sold.
Written by Cláudio Afonso | LinkedIn | X
