Nio Deliveries Double In October; JP Morgan Upgrades To Buy

China’s electric vehicle company Nio (NIO) has revealed that it delivered 5,055 vehicles in October 2020, a new monthly record representing impressive 100.1% year-over-year growth.

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The deliveries consisted of 2,695 ES6s, the company’s 5-seater high-performance premium smart electric SUV, 1,477 ES8s, its 6-seater and 7-seater flagship premium smart electric SUV, and 883 EC6s, the company’s 5-seater premium electric coupe SUV.

NIO delivered 31,430 vehicles in 2020 in total, representing an increase of 111.4% year-over-year.

As of October 31, 2020, cumulative deliveries of the ES8, ES6 and EC6 reached 63,343 vehicles. (See NIO stock analysis on TipRanks).

JP Morgan’s Nick Lai has just upgraded Nio from hold to buy with a Street-high $40 price target (31% upside potential).

“In China’s smart EV market, we expect Nio to be a long term winner in the premium space among Chinese brands” the analyst explained.

Although Lai admits that he missed the stock’s massive 660% YTD rally, his deep dive nonetheless reveals the potential for meaningful upside on a valuation of 3x 2025E EV/sales.

“We conclude that Nio isexpected to dominate ~30% of the premium passenger EV market or reach 334k units by 2025” Lai told investors, adding that the next big event is the 3Q20 result in mid-November.

Going into the print the analyst expects a solid backlog orders of the newly launched EC6 crossover or around eight weeks wait time. He believes GPM should top ~12% from 8% in 2Q20.

Overall, NIO boasts a cautiously optimistic Moderate Buy Street consensus with 6 buy ratings, 3 hold ratings and 1 sell rating. Meanwhile the average analyst price target now suggests significant downside potential from current levels.