Nio Inc. (NIO) stock fell over 4% on Tuesday after the company posted mixed Q3 results. Following the report, top Macquarie analyst Eugene Hsiao downgraded the stock from Outperform to Neutral. He also cut his price target to $5.30 from $6.70, citing a softer 2026 demand outlook and weaker near-term expectations.
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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.
Soft Outlook Drives Rating Cut
The 5-star analyst downgraded the stock mainly due to weaker-than-expected fourth-quarter delivery guidance. Nio now expects 122,500 deliveries at the midpoint, which is far below the earlier target of 150,000 units. He said this drop signals slower demand ahead and creates uncertainty going into next year.
He noted that the decline in demand is partly due to the end of government subsidies, which has hurt demand for the Onvo lineup and added pressure on near-term sales. The analyst also said that NIO will not launch any new models until the second quarter of next year, and as a result, demand during the first quarter may remain soft.
With slower growth, reduced guidance, and limited catalysts, he believes the stock no longer supports a bullish stance.
Improving Margins Offer Some Relief
Despite the weaker outlook, the analyst pointed to one positive development during the quarter. Vehicle margin improved to 14.7% in Q3, helped by stronger sales of the Onvo L90 and ES8. He now expects margins to keep improving and reach around 18% by the fourth quarter.
Even so, he said the progress is not enough to offset softer sales guidance and the overall slowdown in demand.
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 25.45% upside potential from current levels.
