Nio: Morgan Stanley Maintains Bullish Price Target After Record Deliveries
Written by Cláudio Afonso | LinkedIn | X
The electric vehicle maker Nio reported on Saturday the delivery of 20,544 vehicles marking its best monthly result ever. In a new research note, Morgan Stanley said Nio‘s record deliveries in May were “in line with raised expectations” as the firm keeps the $10 price target.
Based on the last closing price at $5.39, Morgan Stanley’s price target implies an upside potential of about 85 percent as the firm keeps the overweight rating on the shares.
“The SUV sales (ES6+ES7+ES8+EC6) rose 38 percent month over month, to 12.2k units, and sedan models were up 30 percent month over month to 8.4k units. Nio renewed its promotion package on June 1, leaving its BaaS offer unchanged but reducing battery swap vouchers from 60 to 40,” the analyst stated.
The firm says the focus is now shifting to the margin figures and to the guidance for the second quarter that will be provided by the management on the upcoming earnings call on June 6.
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“All eyes on order sustainability and margin: Nio‘s share price has outperformed this week on positive sector movement and raised expectations on 2Q volume guidance backed by solid order momentum,” Morgan Stanley analyst wrote.
Ahead of the financial results from the first quarter, Tim Hsiao foresees “more stock volatility” while waiting for more details on the order backlog for Nio’s first sub-brand Onvo.
“We expect more stock volatility ahead of the 1Q print due June 6 and believe further upside will hinge on more bullish comments on the order/margin outlook as well as further color on Onvo,” Hsiao added.
Nio announced on Friday that has secured a significant strategic investment of 1.5 billion rmb (approximately $232.56 million) for its “Nio Power” company from Wuhan Guangchuang Fund and other investors.
“Nio Power secures Rmb1.5b investment, led by Wuhan Guangchuang Emerging Technology Venture Capital Fund Phase I. The proceeds will be used to enhance R8D, manufacturing and operations in battery charging/swapping and energy storage, etc. NIO also further expanded its battery-swapping strategic partnership with GAC and FAW in May,” the analyst concluded.
In April, Nio had delivered 15,620 vehicles, representing an increase of 134.6 percent year over year with deliveries consisting of 8,817 SUVs and 6,803 sedans.
At a media event held in Amsterdam last week, Nio‘s founder and chief executive, William Li, announced that the brand plans to enter the UK market “probably next year.”
Nio is preparing to expand its European lineup with the introduction of its flagship sport utility vehicle, the EL8, originally launched in China in late 2022.
An Ho, Nio’s general manager for the Norwegian market, hinted at the model’s impending launch in Europe via a post on LinkedIn.
Written by Cláudio Afonso | LinkedIn | X
