Nio rises as Citi upgrades the car maker and says the stock could soar 50% on demand for electric vehicles in China

GettyImages 1232435708
A Nio EVE EP9 All-Electric Supercar is on displayed during the 19th Shanghai International Automobile Industry Exhibition at National Exhibition and Convention Center on April 21, 2021 in China.

  • Nio rose Tuesday after Citi upgraded the Chinese EV maker to “buy” from “neutral.”
  • Citi raised its price target to $58.30 from $57.60, implying potential upside of 50%.
  • In May, Nio’s vehicle delivery was adversely impacted for several days due to a semiconductor supply shortage.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares of Nio rose 4% on Tuesday after Citi upgraded the Chinese car maker to “buy” from “neutral,” citing a surge in demand for electric vehicles in China.

Citi lifted its 2021 sales estimate for electric vehicles in the country to an estimated 2.52 million units from 1.79 million units. For 2025, the firm also boosted sales estimates to 7.84 million units from 6.86 million units.

Citi said it expects that the uptick in the second quarter order backlogs will increase Nio’s revenue and market share in the second half of 2021.

Citi’s new price target of $58.30, raised from $57.60, represents a potential 50% upside from Friday’s closing price of $38.62. The bullish new target comes despite a rough year so far in 2021 for the electric vehicle maker, and the industry broadly, as supply chain and manufacturing constraints weigh on car makers’ delivery guidance.

“Based on the current production and delivery plan, the company will be able to accelerate the delivery in June to make up for the delays from May,” Nio said in a statement Tuesday. “The company maintains and reiterates the delivery guidance of 21,000 to 22,000 vehicles in the second quarter of 2021.”

Read the original article on Business Insider

Nio reverses losses, jumps 6% after record 1st-quarter deliveries outweigh chip-supply shortages

NIO EP9 electric car is displayed at its store in Beijing
NIO EP9 electric car is displayed at its store in Beijing

  • Nio reversed its early-morning losses and jumped as much as 6% on Friday after its record first-quarter earnings was overwhelmed by chip supply shortages.
  • Nio saw its first-quarter revenue grow 481% to $1.2 billion, handily beating analyst estimates.
  • “The supply chain is still facing significant challenges due to the semiconductor shortage,” Nio’s CEO said.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

The ongoing global computer chip shortage that has impacted automakers across the globe is also hurting Nio, according to the company’s first-quarter earnings report.

Nio initially fell as much as 4% in Friday trades after its first-quarter earnings beat was overshadowed by the potential slowdown in car production due to a lack of semiconductor supply. But those losses were ultimately reversed, with investors brushing aside chip supply concerns and bidding shares of Nio higher by as much as 6%.

“The overall demand for our products continues to be quite strong, but the supply chain is still facing significant challenges due to the semiconductor shortage,” Nio CEO William Li said.

Nio was already forced to lower its delivery guidance and temporarily halt production last month due to the lack of supply of semiconductors.

The supply shortage has been top of mind for investors this past week, with Apple CEO Tim Cook telling investors it was forced to delay iMac and iPad production and Tesla CEO Elon Musk telling investors the electric vehicle maker has had “insane difficulties” with its supply chain over the last quarter. Ford also said it expects a significant hit to production due to the supply shortage.

First-quarter revenue for Nio hit a record $1.2 billion, handily beating analyst estimates by $160 million and representing year-over-year growth of 481% as demand for electric vehicles in China soars. The company delivered 20,060 vehicles in the quarter, representing a 423% increase year-over-year and a sequential increase of 16%.

The China-based EV manufacturer expects to deliver 21,000-22,000 vehicles in the second quarter, representing year-over-year growth of more than 100%.

Nio isn’t the only car company experiencing a surge in demand from Chinese consumers. Tesla CEO Elon Musk believes China will represent the company’s biggest market in the future, as it continues to scale production in the country.

nio chart.JPG
Read the original article on Business Insider

Nio’s 2-day plunge stretches to 24% as electric-vehicle stock momentum slows

Nio
  • Nio shares fell as much as 18% Tuesday, extending their two-day loss to 24%.
  • The company is one of several electric-vehicle makers to see sharp two-day declines.
  • Tesla specifically has led a broader sell-off in tech stocks.
  • Visit the Business section of Insider for more stories.

Nio stock slid as much as 18% on Tuesday, extending the electric-vehicle maker’s two-day skid to 24%. The company has been swept up in a broader industry sell-off led by larger rival Tesla.

Shares of both company are being pulled back alongside other technology stocks as investors evaluate rising borrowing costs in the face of rising bond yields. Bond yields have stepped higher as investors price in a potential pickup in inflation on the back of economic recovery from the COVID-19 pandemic.

“Given their aggressive discounting to present of long-term cash flows, they’re suffering from the same effects as investment grade corporate bonds and anything else that pushes cash flow far into the future,” Bespoke Investment Group said of tech stocks in a Monday note.

For evidence, the firm highlighted the Nasdaq 100‘s more than 4% underperformance versus the Russell 2000 index of small-cap stocks over the past two days.

Tesla shares fell 5% as much as 9% on Tuesday following a similarly-sized drop the prior day. The stock has been under pressure since the company stopped orders for the lowest-priced version of its Model Y SUV over the weekend.

Prior to the two-day dip, Nio’s stock price had been climbing in recent months on growing interest among investors in electric vehicles and green-energy products, factors that have also contributed to the surge in shares of EV maker Tesla.

Screen Shot 2021 02 23 at 8.53.05 AM
Read the original article on Business Insider