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Investing.com - Nio (NYSE:NIO) stock jumped 11% on Monday against a 0.3% rise in the Hang Seng Index following strong preorder numbers for its new Onvo L90 model. The rally extends the stock’s impressive 14.37% gain over the past week, though InvestingPro data shows the stock remains below its Fair Value.
Morgan Stanley (NYSE:MS) reiterated an Overweight rating on Nio with a $5.90 price target, noting the company has received 30,000-35,000 preorders for the Onvo L90 based on the firm’s latest channel checks. According to InvestingPro, analyst targets for NIO range from $3.01 to $8.19, reflecting mixed sentiment on this prominent player in the automotive sector.
While preorders fell short of the 60,000+ achieved by the Onvo L60 in the third quarter of 2024, market expectations for the L90 were considerably lower due to its higher price point and execution challenges with the L60 launch.
Morgan Stanley views the L90 as "highly competitive" in the sub-300,000 RMB segment, citing its "superior interior space and specs," and believes monthly sales could easily exceed 5,000 units.
The firm attributes Monday’s share price rally largely to short-covering trades, as Nio had been "heavily shorted" before the L90 launch, and suggests investors will continue monitoring store traffic and preorder intake before deliveries begin in August.
In other recent news, NIO Inc . reported a delivery of 24,925 vehicles in June, marking a 17.5% year-over-year increase. The second quarter saw a total of 72,056 deliveries, a 25.6% rise compared to the previous year. However, NIO’s first-quarter earnings report revealed weaker-than-expected results, with revenue at RMB 12.0 billion, a 21.5% increase year-over-year but a 38.9% decline from the previous quarter. Analysts from Bernstein SocGen and Barclays (LON:BARC) lowered their price targets for NIO stock, citing delivery challenges and financial performance concerns. Bernstein SocGen now targets $4.00, while Barclays has reduced its target to $3.00. Meanwhile, Goldman Sachs upgraded NIO’s stock rating to neutral, citing confidence in the company’s cost reduction strategy. Morgan Stanley reiterated an Overweight rating, highlighting the launch of the Onvo L90 SUV as a positive development. NIO’s ONVO brand plans further expansion with the upcoming launch of the L90 SUV in the third quarter. These developments reflect both challenges and strategic efforts within NIO to navigate the competitive electric vehicle market.
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