Nio, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Ming-Hsun Lee from Bank of America Securities reiterated a Hold rating on the stock and has a $7.10 price target.
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Ming-Hsun Lee has given his Hold rating due to a combination of factors that reflect both positive developments and existing challenges for Nio. The company has shown promising signs with its recent model launches, such as the ONVO L90 and the third-generation ES8, which have been well-received in terms of space and performance-to-cost ratio. These new models are expected to drive an increase in vehicle deliveries, with management projecting significant year-over-year growth in the upcoming quarters.
Despite these positive indicators, Lee maintains a Hold rating as the anticipated benefits from Nio’s volume growth and narrowing losses appear to be already factored into the current stock price. Additionally, while Nio is on track to achieve a non-GAAP net profit breakeven by the end of 2025, the company still faces challenges in reducing marketing expenses and achieving its targeted gross margins. The valuation adjustments, including a higher weighted average cost of capital, also suggest a cautious approach, leading to the reaffirmation of a Neutral stance on the stock.
Lee covers the Consumer Cyclical sector, focusing on stocks such as Nio, Li Auto, and XPeng, Inc. ADR. According to TipRanks, Lee has an average return of 21.2% and a 42.39% success rate on recommended stocks.
In another report released yesterday, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $6.50 price target.