Durable Goods (Jun F) -9.4% vs 9.3% Prior, Ex-Trans 0.2% vs 0.2%
On Friday, BofA Securities analyst Ming Hsun Lee revised the price target for NIO Inc . (NYSE:NIO) shares, adjusting it downward to $4.90 from the previous $5.00, while reaffirming a Neutral rating on the stock. Currently trading at $4.51, InvestingPro analysis suggests NIO is undervalued, with analyst targets ranging from $3.90 to $12.49. The adjustment comes after the company’s management provided guidance for vehicle deliveries and revenue expectations, indicating a significant year-over-year increase.
NIO’s management has forecasted vehicle deliveries to reach between 41,000 to 43,000 units, representing a growth of 36% to 43% compared to the previous year. Revenue projections are also optimistic, with expectations ranging from 12.4 to 12.9 billion RMB, marking an increase of 25% to 30% year-over-year. This builds on the company’s strong revenue growth of 15.67% over the last twelve months. In light of this guidance, BofA Securities has increased its 2025 and 2026 volume sales estimates for NIO by 0.4% and 1.7%, respectively.
Despite the positive outlook on sales volume, BofA Securities has made a downward revision to its gross profit margin (GPM) estimates for NIO for the years 2025 and 2026. InvestingPro data shows current gross margins at 8.65%, confirming the company’s margin challenges. The new estimates reflect a decrease of 0.2 percentage points for 2025 and 0.6 percentage points for 2026. Additionally, the firm has adjusted its expectations for NIO’s non-GAAP net loss, anticipating a 3% increase for 2025 and a 3% decrease for 2026, aligning with InvestingPro’s observation that the company remains unprofitable with a net loss of $3 billion in the last twelve months.
The price target adjustment to $4.90, also reflected in Hong Kong dollars as HKD38 (down from HKD39), takes into account NIO’s fourth-quarter results from 2024 and revisions to valuation inputs, which were not detailed in the context. BofA Securities’ stance remains neutral, with the expectation that the positive impact of increased sales volumes in 2025 may be partly counterbalanced by slower margin growth and high operational expenses. InvestingPro subscribers can access detailed financial health metrics and 7 additional key insights about NIO through the comprehensive Pro Research Report, available exclusively on the platform.
In other recent news, NIO Inc. reported its fourth-quarter revenue at RMB 19.7 billion, slightly below the consensus estimate of RMB 20 billion. Earnings per share were RMB (3.45), missing the expected RMB (2.59). NIO’s guidance for the first quarter projects revenue between RMB 12.4 billion and RMB 12.9 billion, which is significantly lower than the consensus of RMB 22.5 billion. The company also anticipates vehicle deliveries of 41,000 to 43,000 units, marking a 41-44% decrease quarter over quarter. Despite these challenges, Morgan Stanley (NYSE:MS) maintains an Overweight rating with a $5.90 price target, while Mizuho (NYSE:MFG) has reduced its price target from $5.00 to $4.20, retaining a Neutral stance.
NIO’s vehicle gross margin remained steady at 13.1% in the fourth quarter, though it fell short of Morgan Stanley’s estimate of 14.1%. The company is also focusing on restructuring efforts to reduce costs and improve margins. In the realm of technological innovation, NIO has surpassed Tesla (NASDAQ:TSLA) in the Wards Intelligence Software-Defined Vehicle ranking, now holding the second position. This highlights NIO’s progress in developing vehicles with advanced software capabilities. Investors are closely watching NIO’s developments, particularly the upcoming NT 3.0 facelifts and the planned launch of several new models amid intense competition in the electric vehicle market.
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