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Investing.com - Morgan Stanley (NYSE:MS) raised its price target on NIO (NYSE:NIO) to $6.50 from $5.90 on Wednesday, while maintaining an Overweight rating on the Chinese electric vehicle maker. The stock, which has gained nearly 10% in the past week and currently trades at $5.07, appears fairly valued according to InvestingPro analysis.
The investment bank reduced its 2025 volume estimate by 9% to 330,000 units, citing weaker-than-expected performance in the first half of 2025. However, Morgan Stanley kept its 2026-27 volume estimates largely unchanged at 470,000 and 586,000 units, respectively. With revenue growing at 23.7% and gross margins at 10.2%, NIO faces profitability challenges, as detailed in the comprehensive InvestingPro Research Report.
The firm expects solid order intake for NIO’s Onvo L90 model to drive a meaningful volume recovery in 2026. While 2025 gross margin estimates remain largely unchanged, Morgan Stanley slightly increased its 2026-27 estimates by 0.2 percentage points to reflect product mix shifts.
Morgan Stanley lowered its operating expense estimate for 2025 by 10%, reflecting NIO’s ongoing restructuring efforts and headcount reduction. This adjustment has narrowed the bank’s net loss estimates by 8%, 13%, and 9% for 2025-27, respectively.
The revised price target represents a 10% increase from the previous target, with Morgan Stanley’s base-case scenario value rising 10% to $6.60, while bull and bear-case scenario values increased 11% to $10.70 and $2.10, respectively.
In other recent news, NIO Inc . reported the delivery of 21,017 vehicles in July, marking a 16% decrease from June’s 24,925 vehicles. This decline followed a strong performance in June, where deliveries rose 17.5% year-over-year. The company also announced the beginning of deliveries for its firefly vehicles in Europe, specifically targeting urban environments in the Netherlands and Norway. Additionally, NIO received 30,000-35,000 preorders for its new Onvo L90 model, according to Morgan Stanley, which has reiterated an Overweight rating on the stock with a $5.90 price target. The Onvo L90, introduced at a pre-sale price, is set for deliveries starting August 1. Meanwhile, NIO’s premium smart electric SUVs accounted for a significant portion of July’s deliveries, although they experienced a 13% decline from the previous month. These developments highlight NIO’s ongoing efforts to expand its product lineup and market presence.
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