On April 19, 2021, a Nio eP9 automobile is seen at the 19th Shanghai International Automobile Industry Exhibition in Shanghai.
Getty Images/AFP/Hector Retamal
Size of the text
NIO
After an analyst became more bullish, the stock is moving again. Tuesday,
Citigroup
‘s Jeff Chung raised his price target for the Chinese electric car company, predicting that the third quarter and second half of 2021 will be better. NIO (ticker: NIO) stock has a price target of $72 per share, up from $58.30. It’s the analyst’s second target price increase this month, though the first was minor. On June 1, he raised his NIO stock price estimate to $58.30 from $57.60.
The stock of NIO fell 2.8 percent the next day after the small target increase. However, shares are up 5.6 percent in lunchtime trading on Wednesday. The
S&P 500 Index
and
The Dow Jones Industrial Average (DJIA) is a stock market index
are up approximately 0.1 percent and 0.3 percent, respectively, in comparison. NIO stock has had a fantastic month, with shares up about 36% this month, bringing year-to-date gains back into positive territory. In 2021, the stock market is up roughly 8%. Chung’s gains are well-deserved. He expects NIO to have “strong” second-quarter delivery numbers, with sequential gains in the third and fourth quarters. Chung said that this is “even without a considerable alleviation of the sector-wide chip shortage.” In 2021, all auto production will be hampered by a global semiconductor shortage. When discussing first-half production, NIO and others have mentioned the chip shortage. After delivering 20,060 vehicles in the first quarter, NIO aims to deliver between 21,000 and 22,000 vehicles in the second quarter. The company is predicted to increase sequentially from Q1 to Q2, but the rate of growth will be lower than in recent quarters. Chung estimates that NIO will deliver roughly 21,200 vehicles in the second quarter based on his industry research. He expects 93,000 automobiles to be delivered for the entire year, with around 52,000 deliveries in the second half. He’s raising his price target partly due to higher deliveries, but he’s also raising his target valuation multiple because EV sales in China are expanding faster than he predicted. His price forecast for NIO is based on 9 times expected 2022 sales, up from around 7 times. Chung isn’t the only one who thinks this way. On Wall Street, NIO is a well-liked stock. Approximately 75% of analysts tracking the stock rank the stock as a Buy. The average Buy-rating ratio for S&P 500 stocks is around 55%. The average analyst target price for the stock is around $60. To contact the editors at Barron’s, send an email to editors@barrons.com./n
Read More
