Nio (NYSE: NIO) shares have recovered 15.1% over the previous three months however are nonetheless down almost 39% year-to-date. Provide chain challenges, a persistent scarcity of chips, macro pressures, and COVID-19 restrictions have hit Nio and different electrical car (EV) makers. Nio shares had been additionally impacted by the danger of delisting from the U.S. inventory change, however the firm addressed this concern by itemizing its shares on the Hong Kong and Singapore inventory exchanges. Whereas near-term pressures proceed to trouble Nio traders, Wall Avenue analysts are extremely bullish on the inventory.
Nio’s Future Seems Promising
Nio is likely one of the main EV makers in China, the biggest EV market on the earth. The corporate’s Battery as a Service (BaaS) and Autonomous Driving as a Service (ADaaS) choices give it an edge over its rivals. Nio continues to put money into applied sciences to assist innovation.
In June, NIO launched its ES7 mannequin, a mid-large five-seater SUV, which relies on the corporate’s NIO Expertise 2.0 platform. The corporate has additionally enhanced its ES8, ES6, and EC6 automobiles. The deliveries of the ES7 SUV and the upgraded variations are anticipated to start in August.
Nio’s June deliveries elevated by 60.3% year-over-year to 12,961 automobiles, reflecting a robust restoration following disruptions brought on by lockdowns. The corporate’s second-quarter deliveries grew 14.4% year-over-year to 25,059. Nonetheless, Q2 deliveries declined in comparison with 25,768 deliveries within the first quarter, as a result of COVID-19 restrictions in China.
Whereas Nio could be below strain as a result of provide chain woes over the close to time period, the corporate’s long-term prospects look brilliant, primarily based on the sturdy demand for EVs in China and different main markets, like Europe. After making its manner into Norway, Nio is coming into Germany, the Netherlands, Sweden, and Denmark. Nio goals to broaden its footprint to 25 nations and areas by 2025.
Wall Avenue is Extremely Bullish on Nio
Final month, HSBC analyst Yuqian Ding raised his worth goal on Nio inventory to $28 from $26 and reiterated a Purchase score, primarily based on a robust conviction within the firm’s fundamentals. Ding highlighted the rebound in Nio’s gross sales volumes and expects month-to-month quantity to proceed to enhance, pushed by the deliveries of three new fashions within the second half of 2022. The analyst additionally expects volumes to profit from the anticipated launch of recent fashions past 2022.
Total, Nio scores a Sturdy Purchase consensus score primarily based on 10 unanimous Buys. The typical Nio worth goal of $33.66 implies 72.70% upside potential from present ranges.
Conclusion
Wall Avenue analysts are extremely bullish on Nio inventory primarily based on its robust place within the Chinese language EV market, growth into Europe, and its BaaS providing. Analysts are wanting past the corporate’s near-term challenges and see robust upside potential from present ranges.
As per TipRanks’ Hedge Fund Buying and selling Exercise Software, hedge funds have elevated their holdings in Nio by 3.5 million shares within the final quarter. Total, the Hedge Fund Confidence Sign is Very Optimistic for Nio primarily based on the exercise of seven hedge funds in the latest quarter.
