NIO (NIO) is gaining optimism from Wall Street following the release of its Q3 earnings report. A couple of analysts have pointed to improving margins, tighter cost control, and a stronger product lineup as key factors supporting the Chinese automaker’s road to profitability.
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Morgan Stanley Optimistic about NIO’s 2026 Profit Strategy
Morgan Stanley analyst Tim Hsiao reiterated a Buy rating and a $9 price target, reflecting confidence in the company’s growth prospects. He cited NIO’s plans to launch three new large SUVs, ES9, ES7, and Onvo L80, in mid-2026, which will help drive higher sales volumes.
Also, the analyst noted that management has set a target of 20% gross profit margin (GPM) in 2026, supported by supply chain cost savings, economies of scale, and a favorable product mix. With existing models such as the ES6, EC6, and ES8 already delivering margins above 20%, Hsiao believes that NIO can sustain profitability even after offering discounts.
He added that limiting R&D spending to RMB 2 billion per quarter and SG&A at 10% of revenue could enable NIO to reach breakeven in 2026 on an adjusted basis.
US Tiger Securities Sees NIO on Track for Breakeven
Similarly, US Tiger Securities analyst Bo Pei reiterated a Buy rating with an $8 price target, citing NIO’s “solid 3Q25 print” marked by margin recovery, improved operating efficiency, and continued momentum across its three‑brand portfolio.
While fourth‑quarter delivery guidance of 120,000 to 125,000 units fell short of market expectations, Pei noted management’s confidence in achieving quarterly breakeven in Q4. Looking forward, he expects 2026 to be a positive year, backed by new large SUVs, lower costs, and better efficiency from scale.
Is NIO a Buy, Sell, or Hold?
Overall, Wall Street has a Moderate Buy consensus rating on NIO stock based on six Buys, six Holds, and one Sell assigned in the last three months. The average NIO stock price target of $6.90 implies 24.32% upside potential from current levels.
