Nio Inc. (NIO) recently posted stronger-than-expected Q3 results, driven by an increase in vehicle deliveries and a narrower net loss. In a new report, Freedom Capital upgraded the stock from Hold to Buy and raised its price target to $7, up from $6.50, implying roughly 22% upside. The analyst said Nio’s recent momentum in deliveries and its expanding product strategy support a more optimistic outlook heading into next year.
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Notably, the EV maker reported a Q3 loss of ¥1.14 per share, which was better than the estimated ¥1.59 loss. Deliveries came in strong at 87,071 units, up 40.8% year-over-year. However, revenue of ¥21.79 billion fell slightly short of the consensus estimate of ¥22.30 billion.
Analyst Sees Stronger Growth Ahead
The analyst highlighted that Nio has shown clear improvement in delivery volume in recent quarters, and that trend appears to be strengthening. For the third quarter, Nio delivered 87,071 vehicles, representing a 41% year-over-year increase, and the firm expects this growth to continue.
Freedom Capital believes that Nio’s plan to operate multiple brands, including its main premium NIO brand and newer, lower-cost sub-brands like Onvo and Firefly, could help the company reach a broader range of buyers in China’s competitive EV market.
The analyst expects this multi-brand expansion, along with rising shipments, to push the company’s revenue to “new record levels” next year.
Growing Delivery Targets Fuel Optimism
Nio expects fourth-quarter deliveries to reach between 120,000 and 125,000 units, which represents year-over-year growth of 65% to more than 70%. While the company had earlier mentioned a higher figure of 150,000 units, Freedom Capital still sees the revised range as strong enough to support long-term growth expectations.
The analyst added that Nio’s two newest models, the ES8 SUV and the Onvo L90, are gaining traction and could fuel future demand.
Is NIO a Buy, Sell, or Hold?
Overall, Wall Street has a Moderate Buy consensus rating on NIO stock based on five Buys, seven Holds, and one Sell assigned in the last three months. The average NIO stock price target of $6.67 implies 21.27% upside potential from current levels.
