Morgan Stanley is growing increasingly bullish on Chinese electric car company Nio, updating the stock to overweight from neutral and stating it may rise another 15%.
Chinese electric-vehicle maker Nio was upgraded for the second time this week, now by Morgan Stanley to obese.
Nio (NIO) – Get Report on Wednesday obtained its next upgrade of the week, now from a Morgan Stanley analyst who raised the electric-vehicle manufacturer to overweight from equal weight
Morgan Stanley analyst Tim Hsiao also raised his price target to $20.50 from $12.
Shares of Chinese electric-vehicle manufacturer NIO (NYSE:NIO) were climbing on Wednesday, after bullish comments from analysts at Morgan Stanley and Citibank.
Morgan Stanley was already bullish about the organization’s partnership with Chinese town Hefei, declared in April, but other parts of the business are showing progress faster than anticipated. The stock climbed 4 percent in premarket trading on the new note.
A score of 89 places Nio Inc – ADR (NIO) near the top of the Automobile Manufacturers industry according to InvestorsObserver. Nio Inc – ADR’s rating of 89 means it scores greater than 89% of stocks in the business. Nio Inc – ADR also received an overall score of 66, putting it above 66 percent of all stocks. Automobile Manufacturers is ranked 53 from the 148 businesses.
Overall score – 66
NIO has a Total Score of 66. Find out what this means to you and find the remaining positions on NIO!
NIO almost ran out of money from the first quarter but has now obtained new financing.
The stock broke out into an all-time high this week in response to many Wall Street upgrades.
Volume signs still haven’t affirmed the breakout.
The company recently reported in-line second quarter 2020 earnings and raised third quarter advice, advising that it would deliver between 11,000 and 11,500 vehicles in the next quarter, signaling potential development of more 130% year over year. The better-than-expected quarterly reduction cheered investors, but NIO has never been rewarding, while January’s China coronavirus outbreak raised fears that the company would run out of money. This stress is finally receding, encouraging recent updates by UBS and Morgan Stanley.
In a note to clients, Hsiao said the Hefei government’s current $1.4 billion financing injection”not just removes funding risk but also improvements Nio’s vehicle profitability and cash flow”
Hsiao stated Nio’s inventory performance, financing access and industry franchise collectively produce”self-reinforcing momentum and create Nio an even stronger player to grow its operations and investment worth.”
“Despite acting much more like a trading stock nowadays with significant volatility,” he said,”it is also a growth stock with long-term value unfolding amid recent operational advancement.”
Hsiao stated Nio’s battery-as-a-subscription service offered lower usage cost and”will drive 10% to 36% incremental vehicle revenue in 2021 through 2030.”
“More importantly, with closer involvement with government and major players via battery-as-a-subscription, Nio can fortify its position in the electric-vehicle ecosystem by defining industry norms,” the analyst stated.
Hsiao added that while Nio has been communicating with the marketplace on its BaaS initiative for the past few months,”the official announcement still supplied critical new pieces of information, like the comprehensive monthly program and unit economics which will be crucial to the long-term sustainability of Nio’s BaaS program.”
Supported with a well-thought long-term growth plan and underpinned by more substantial midterm profitability/cash flow improvement with surge in scale, Nio warrants a further valuation rerating, Hsiao said. As an illustration, the stock is currently trading at $19.30 in the pre-market, corresponding to some brand new all-time high. This follows an astounding gain of over 19 percent yesterday. Year so far, NIO stocks now are up a whopping 418 percent based on the current pre-market price level!
NIO Rises To All-Time High Share Price After Ratings Upgrade & Bullish Trading