Dollar rebounds despite Fed independence worries; euro slips
Investing.com -- Morgan Stanley said Nio’s recent surge may be prompting a shift in sentiment, after the stock rallied more than 90% over the past two months to reach the firm’s price target of US$6.50 (HK$50.70).
“Will the rally change the stock narrative?” analysts asked, highlighting four key considerations.
First, Morgan Stanley pointed to “robust ES8 pre-orders,” noting that checks suggested deposits “may have surpassed 30k at the weekend and kept rising.”
While conversion to actual orders remains uncertain, the firm said “constructive feedback underpin the market’s belief that ES8 could go viral as L90 did last month, underpinning a monthly run rate of 40-50k units for NIO Group from Oct.”
Second, the analysts cited “benign fund flow,” with Nio shares’ trading value exceeding “US$2.5bn over the past 2 days, equivalent to the cumulative value over the past 2 weeks.”
Third, sentiment has improved. “While debates on the sustainability of NIO’s recovery persist, we noticed a sharp decline in client enquiries on NIO’s underlying demand and execution risk,” Morgan Stanley wrote. Instead, investors are asking more about “the upcoming L60 and L80 facelifts (both early next year).”
Finally, the analysts said the stock’s momentum may be reinforcing itself.
The bank wrote: “The stock upward movement has been self-reinforcing as investors believe NIO’s share price performance is correlated to capital markets’ willingness to finance its operation and strategic ambitions, which is also linked to its operational value and ability to navigate the accelerating auto industry shakeup.”