Friday, September 22Informative Blogging

6 Analysts Adjust Forecasts on NIO as Stock Surged

nio stock jp morgan

The Global X U.S. Infrastructure Development ETF (PAVE) finished just above break-even. The Health Care Select Sector SPDR Fund (XLV) slipped 0.6%, but rebounded from lows. Hong Kong and many markets around the world will be closed for May 1 Labor Day holidays, including much of Europe. Worse-than-expected overall auto market sales/EV demand; and worse-than-expected competition from rivals with products at similar price points. Given NIO’s current stage in the business life cycle, it was looking for prudent, market-competitive return opportunities for some of its domestically generated cash.

JPMorgan Chase reduced its position in XPeng by about 25 percent in the fourth quarter, from 2.58 million shares at the end of the third quarter to 1.94 million shares at the end of last year. The analyst does believe that there will be a greater volume momentum in the second half of 2023 due to the introduction of new vehicle models, as stated in the note. However, as a result of Tesla’s recent price reductions, the broader EV industry will be under greater pressure to offer lower prices to attract more buyers.

nio stock jp morgan

The agency estimated that its insurance fund would lose $13 billion in the deal. Regulators seized and immediately sold First Republic to JPMorgan Chase for $12 billion. JPMorgan assumes all of the California-based bank’s $92 billion in deposits, including the $30 billion that JPMorgan and other large banks injected into First Republic in March in a bid to head off its collapse.

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(2) The extension of the NEV subsidy program toward 2022, where the battery swap business model is covered by the government’s subsidy scheme, is encouraging. The report said Nio remains attractive from a long-term perspective. Sign up with your email address to receive educational articles, research reports, and trade ideas in your inbox. The value of investments may go down as well as up and investors may not get back the full amount invested. Shares of Nio are down more than 9% in 2023, following a roughly 70% drop last year.

With such negative sentiment being priced in, JPMorgan’s Lai keeps his Overweight (i.e. Buy) rating as is, alongside an $11 price target. If achieved, his price target could offer a potential return of ~67%. According to Lai, there is a surprising bias toward the downside rather than the upside.

This analyst’s new price target for December-2023 is $10, down from $14, which implies an upside of approximately 13% for the stock in the next few years. During Thursday’s pre-market trading session, the stock fell a little more than 1%. Alongside that downgrade comes a new price target for NIO stock. The firm dropped its price target for the EV company’s shares from $14 each to $10 each. That still represents a 13.3% upside from its prior closing price.

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Crucially, however, the CEO also indicated that the company is planning to double this annual target run rate to 300,000 units, corresponding to a monthly production capacity of 25,000 units! The CEO went on to indicate that this enhanced production capacity will come online by the end of 2021. Massive earnings losses among leading stocks have been all-too common in recent days. Not many stocks are flashing buy signals or are on the cusp of doing so.

nio stock jp morgan

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors. First Republic stock crashed 75% last week to fresh record lows, fueled by disclosure of a massive Q1 deposit outflow. Despite efforts to engineer a quasi-rescue by big banks, expectations of an FDIC takeover grew during the week. JPMorgan Chase’s holdings in NIO increased by about 6 million shares, or 378 percent, compared with about 1.6 million shares at the end of the third quarter last year. JPMorgan Chase increased its holdings in NIO by about 6 million shares, or 378 percent, compared with the end of the third quarter. The firm added NIO to its portfolio in the first quarter of 2019 adding 288,448 shares with its total holdings valued at 1.472 million as of March 31 when the price per share was around $5.

The RMB liquidity solutions that NIO has adopted offer an effective means for China’s corporations, all of which are facing a new cash investment market landscape. To achieve these at the same time as new AMP rules were about to go into effect required proactivity. By using the combination, NIO maximised its cash investment return opportunities.

Analyst Ratings

The JPMorgan analyst bumped NIO stock down from an “overweight” rating to a “neutral” rating. For the record, the analysts’ consensus rating for NIO shares is “moderate buy.” That’s based on 12 analysts’ opinions. Jpmorgan Chase & Co
has a history of taking positions in derivatives of the underlying security (NIO)
in the form of stock options. The firm currently holds call options representing 0 of underlying shares
valued at $0 USD
and put options representing 160,000 of underlying shares
valued at $1,682,000 USD
. Reflecting more-speculative story stocks, ARK Innovation ETF (ARKK) slumped 4.5% last week and ARK Genomics ETF (ARKG) 5.3%. Tesla stock is the No. 1 holding across Ark Invest’s ETFs, with Cathie Wood adding more TSLA shares in the past few weeks.

This is down from the 4.5 time multiple that was applied in the past, the analyst said. The analyst noted that the company will begin deliveries of its ET7 sedan by late first quarter and will follow it up with the ET5 mid-size sedan and the ES7 SUV. JP Morgan analysts led by Nick Lai raised their price target on NIO sharply to $40 in a report released on Wednesday. NIO Inc. is a pioneer in China’s premium electric vehicle market. “Bringing our history, global scope and experience, we also share our industry know-how and partnership with NIO’s treasury team to develop its expertise,” says J.P.

  • XPeng reported just over 7,000 EV sales, up fractionally vs. March.
  • Investors likely cut exposure in the past week as many stocks erased gains or flashed sell signals.
  • Shares of Nio are down more than 9% in 2023, following a roughly 70% drop last year.
  • If achieved, his price target could offer a potential return of ~67%.
  • Passively-managed funds do not typically buy options, so the put/call
    ratio indicator more closely tracks the sentiment of actively-managed funds.
  • Regional bank stocks plunged midweek to fresh lows on First Republic’s deposit flight but rallied late in the week.

Initially, megacaps such as Meta Platforms (META) and Microsoft (MSFT) led the comeback, but breadth improved late in the week. In its latest report, JP Morgan gave NIO an Overweight rating and admitted that “we missed the stock’s major rally YTD.” As of the last closing, Nio Inc Class A ADR’s stock price was USD 8.40.

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The company recently announced plans to expand production capacity and launch new models in the coming years. However, JPMorgan’s warning suggests that investors should temper their expectations for the company’s growth and profitability. JPMorgan has downgraded its rating on Nio, a leading Chinese electric vehicle maker, amid concerns that investor expectations for the company have become too high. The investment bank warned that the recent run-up in Nio’s stock price has led to overblown expectations, while a recent earnings miss has added to the downward pressure on the stock. As with any investment decision, it is important for investors to do their own research and make informed decisions based on their own risk tolerance and financial goals. While Nio may still have strong long-term prospects, JPMorgan’s warning highlights the need for caution and careful analysis before making any investment decisions in the electric vehicle maker sector.

  • The author has not received compensation for writing this article, other than from FXStreet.
  • The Tesla (TSLA) rival reported strong Q1 earnings on Thursday.
  • Gasoline futures dipped 0.9% for the week, but 9.1% in the past two weeks.
  • On the earnings conference call, NIO said it will enter the European market and has researched entering the US market according to Reuters.

The firm added a total of 1,400,319 shares during the second quarter and its holdings were valued at $122.24 million, as of June 30. Lai cut his rating to neutral, after being at overweight since October 2020. Passively-managed funds do not typically buy options, so the put/call
ratio indicator more closely tracks the sentiment of actively-managed funds. There were some things going on in the background on Wednesday like as expected central bank moves from the RBNZ and Bank of Canada and higher commodities prices. But unquestionably, the big headline of the day was the softer than expected US CPI print. The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

The stock market rally fell sharply last week, but rebounded to close with solid gains, a shakeout that could set the stage for a stronger advance. Nio’s recent earnings report missed estimates, with the company reporting a net loss of 1.39 billion yuan ($212 million) for the fourth quarter of 2020. While the loss was smaller than in the previous year’s fourth quarter, it was wider than analysts had expected, leading to a sell-off in Nio’s stock. Year-to-date, the shares in this EV stock are down 87% on Wall Street.

nio stock jp morgan

The bank expects the Chinese EV player to expand its Gross Profit Margin (GPM) by 12 percent in the pertinent quarter. Additionally, a strong backlog of orders is also expected to continue acting as a tailwind for the stock. As an illustration of the strong product demand, the wait time for the newly launched EC6 crossover is currently 8 weeks. Finally, the Wall Street giant expects NIO to debut a new sedan at the NIO Day, currently scheduled for December 2020. This will expand NIO’s product portfolio, currently consisting of the ES6 and ES8 SUVs as well as the EC6 crossover. Despite the recent setback, Nio has enjoyed strong sales and a growing presence in China’s electric vehicle market.

The station is located at Svarthagsveien 1, 1540 Vestby, between Oslo and Gothenburg. On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Yet meeting its newly broadened appetite for returns proved challenging at a time of ultra-low rates. To find good ideas for EV stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights. Shares in Nio are down sharply this year, with the stock having lost 70% of its value. Despite the loss in share price, JPMorgan’s Nick Lai sees Nio as a good value. As of press time, NIO shares are trading 8.18% higher at $21.68 per share. Regarding the overall new energy vehicle (NEV) market, Lai said he remains “constructive” this year, but he believes the growth rate will decelerate sharply, to 23% in 2023 from 80% in 2022.

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