Nio Pops on Deliveries, New Analyst Perspective

Nio Pops on Deliveries, New Analyst Perspective

Electric vehicle maker Nio (NYSE:NIO) popped up 3.9% in premarket trading coming off the long holiday weekend, and held onto those gains going into today's session as well. Recent word of improving vehicle deliveries, along with improving analyst sentiment, gave the company extra juice in the market, and there are signs the broader electric vehicle market is seeing similar gains today as well.

A Surge In May Deliveries

Perhaps the biggest reason for Nio's gains through May was just how many vehicles it managed to get to customers. Reports noted that the company delivered 6,711 vehicles in May. That may not sound like much-given reports that Tesla (NASDAQ:TSLA) delivered nearly 185,000 vehicles in the first quarter of 2021 alone, but for Nio, this is a significant advance. The 6,711 vehicles delivered in May represented a 95% increase for the company over the same time last year.

Better yet, reports note that Nio expects June to be on track with further gains. Nio noted that the semiconductor and chip shortage facing much of the world actually hampered its May gains somewhat, but that, according to “...the current production and delivery plan”, the company actually looks to make up for the May shortfall with June's results. The company also held to its earlier guidance, expecting to deliver between 21,000 and 22,000 vehicles for the second quarter of 2021.

Additionally, Nio took steps to help ensure its production numbers would remain strong. The company established a three-year renewal of its manufacturing agreements with Jianghuai Automobile Group, which is owned by the Chinese government. The new agreement calls for Jianghuai to raise the production of Nio units to 240,000 such vehicles per year. Thus, Nio isn't likely to see any significant disruption in production until sometime in 2024 at the earliest, and given the levels of production and delivery already seen, the company can begin building a backlog against the future potential downturn.

What Are Financial Analysts Saying About NIO Stock?

The Nio stock forecast is looking increasingly positive, as revealed by our latest research on financial analyst sentiment. Nio stock has been rated a consensus “buy” since January 2021, when it shifted from a “hold” rating to its current buy.

A year ago, Nio had four “buy” ratings to its credit, along with three “hold” and one “sell.” Six months later, that shifted to six “buy”, five “hold” and one “sell.” Today, we stand at 12 “buy” ratings and six “hold”, with all “sell” interest having left the field since March.

The Nio stock price target, meanwhile, occupies a fairly broad range. The current average share price target is $50.78, with a high of $80.30 and a low of $13.50. With Nio shares trading at $41.69 as of this writing, there's still some upside potential to be had here, as some of the latest word in the analyst sector noted. There are signs the entire electric vehicle market is making gains as well; reports noted that one of Nio's biggest competitors, Xpeng (NYSE:XPEV) reported a gain of 483% in vehicles delivered against this time last year, bringing 5,686 electric vehicles to consumers.

Recent developments for Nio stock have been especially positive. Earlier today, Citi upgraded Nio from “neutral” to “buy”, noting that the Nio stock dip seen in recent weeks coupled with the rapidly accelerating pace of deliveries is presenting a buying opportunity. A month ago, Mizuho followed suit, upgrading its price target to $65 from its previous $60. Days prior to that, Deutsche Bank Aktiengesellschaft reiterated its “buy” rating on the company and CLSA started coverage of the company as a “buy” with a $50 price target.

Companies in This Article:

CompanyCurrent PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
NIO (NIO)$46.91-1.0%N/A-49.90Buy$51.69
Tesla (TSLA)$623.31+1.1%N/A623.31Hold$458.56
XPeng (XPEV)$45.23+2.2%N/A-27.92Buy$51.28