Hong Kong-based carmaker NIO Inc. (HK:9866) has recently received a Buy rating from DBS, which predicta a 63.4% upside in its shares. Analyst Rachel Miu reiterated a Buy rating on NIO stock earlier this week, though she lowered her price target from HK$65 to HK$58. Miu remains optimistic about the company’s upcoming product lineup, which is expected to boost its market reach and top-line growth.
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NIO is a Chinese automotive company known for its premium smart EVs.
NIO’s Q3 Performance Missed the Mark
NIO reported a mixed set of numbers in Q3, falling behind the market expectations. While vehicle deliveries in the third quarter rose by 11.6% year-over-year, the company faced a 2.1% decline in total revenues. This was primarily due to China’s ongoing price competition.
Despite this, Nio expects a rebound in the fourth quarter, with growth in both deliveries and revenue. Nio expects Q4 vehicle deliveries between 72,000 and 75,000 units, up 43.9% to 49.9% year-over-year. It expects revenues to reach ¥20.38 billion, reflecting a 19.2% increase. The company is confident about its brands, such as the Onvo, along with the upcoming launch of the highly anticipated Firefly.
DBS Predicts Big Gains Ahead for NIO Shares
DBS analyst Miu predicts robust growth in vehicle sales, with a 60% year-over-year increase in FY25 and 30% in FY26, driven by upcoming launches. The company plans to launch four new models in 2025, including a premium model and two SUVs. Miu believes this will further strengthen NIO’s market presence, attract a wider audience, and boost revenue growth.
Miu acknowledged that NIO’s recent performance fell short of expectations but highlighted the company’s focus on boosting production efficiency and streamlining its supply chain as key factors likely to enhance vehicle margins. She also commended NIO’s new sub-brand Onvo, which targets the affordable EV market, calling it one of the reasons behind her Buy rating.
Is NIO a Good Stock to Buy?
Overall, analysts remain cautious about NIO, advising investors to monitor the production of its new models closely. Additionally, potential tariff policies under the Trump administration add to the uncertainty.
Recently, Goldman Sachs downgraded its rating on NIO stock from Hold to Sell, predicting a downside of over 15%. Goldman holds a contrasting view on the upcoming line-up and expressed concerns over a slow production ramp-up for Onvo. It also highlights intense competition and rising expenses as potential risks to NIO’s future profitability.
What Is a Good Target Price for NIO?
As per the consensus among analysts on TipRanks, 9866 stock has been assigned a Hold rating. The NIO share price target is HK$46.32, which implies an upside of 30.5% from the current price level.
