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Analysts predict over 70% gains for Nio and Li Auto stocks despite recent decline

Analysts predict over 70% gains for Nio and Li Auto stocks despite recent decline
Jordan
Major
7 months ago
5 mins read

As a result of the mounting uncertainty over the Omicron variant around the world, numerous equities have taken a significant knock in the market during the past week.

In particular, the stock prices of Chinese electric vehicle companies, such as Nio Inc (NYSE: NIO) and Li Auto’s (NASDAQ: LI), plunged precipitously on Friday as the market came to a close, with the former falling by 11.19% and the latter plummeting 15.95%.

Despite the short-term losses that appear to be affecting the majority of stocks on the market, stock trading investors remain bullish on the two electric vehicle companies, projecting more than 70 percent gains for each of the two firms over the next 12 months, despite the recent market volatility. 

Therefore, we have detailed their analyst target prices below, as well as examined the most recent changes on the charts, in order to provide you with a complete picture of each company and what to expect over the coming weeks and months.

Li auto chart analysis

Indeed, Li auto dropped $5.41 (15.95%) to $28.50 on Friday. Notably, Li had climbed in price in November after news that it had more than tripled its revenue in the third quarter compared to the same time the previous year.

The rapid growth of LI’s sales is a reflection of the growing demand for electric vehicles among Chinese customers. 

However, thanks to the latest price crash, the stock is trading below its 20, 50, and 200-day simple moving averages, which is a bearish sign. Furthermore, the volume has increased significantly during the past few days, which is a negative indicator when combined with the recent steep decline.

LI 20-50-200 SMA lines chart. Source. Finviz.com data. See more stocks here.

In the last month, LI has been trading in a wide range between $27.73 – $37.45, and it is currently trading near the lows of this zone.

Since price movement has been a little bit too volatile to find a solid entry and exit point, it is wise to wait for a period of consolidation first. Nevertheless, support is found at $25.58 from a horizontal line in the daily time frame, whereas a resistance zone ranging from $32.60 to $32.69 is formed by a combination of multiple trend lines and important moving averages across various time frames.

Analysts’ target 78% upside for Li

On Wall Street, analysts think the Li stock will reach $50.99 in the next 12 months, a 78.91% rise from its current price of $28.50, with a high estimate of $64 and a low forecast of $43.

LI analysts’ price target. Source: TipRanks.com

Based on the price forecasts of seven TipRanks experts’ stock recommendations for LI over the last three months, notably, all seven analysts suggest to ‘Buy,’ with none of the analysts advocating to ‘Hold’ or ‘Sell.’ 

The consensus rating for LI stock is a ‘Strong Buy,’ with a 78.91% upside at its average price target, making it an attractive investment for both traders and investors alike.

Nio chart analysis

Prices have been decreasing precipitously recently, and it is best to avoid taking any new long holdings at this time. Volume has increased significantly in the previous couple of days, and when combined with the sharp decline in the stock price, this is a bearish indicator.

In the previous month, NIO has traded in a range of $31.50 – $44.27, which is a wide range, and it is presently trading towards the lows of this range. 

Recently, we noted that NIO’s short-term momentum was positive, as it traded above its 20 and 50-day simple moving averages. However, NIO is presently trading 25% below its 20-day SMA due to wider market concerns and 20% below its 50-day SMA.

NIO 20-50-200 SMA lines chart. Source. Finviz.com data. See more stocks here.

A resistance zone spanning the price range of $38.56 to $38.98 is generated by a combination of many trend lines and key moving averages in various time periods.

Although Nio does not provide a good set up since prices have been stretched to the negative in recent weeks, it is preferable to wait for some stability before entering the market.

Analysts’ target 88% upside for Nio

Meanwhile, 8 Wall Street analysts have offered a 12-month price target with an average price set at $60.67. The highest forecast is $88.71, while the lowest prediction is $45. The average price target represents an 88.71% change from the last price of $32.15.

NIO analysts’ price target. Source: TipRanks.com

A majority of the experts, seven of the eight, suggest that investors’ Buy‘ NIO stock, with one recommending that investors hold it.

The consensus rating for Nio stock is a ‘Strong Buy,’ with an 88.71% upside from its average price target, making it an attractive investment for both traders and investors alike.

Nio’s stock has underperformed compared with its closest rivals, including Tesla (NASDAQ: TSLA), XPeng (NYSE: XPEV), and LI, especially when factoring in its Q3 earnings results.

Given the continued growth of the EV sector, it is likely that those enterprises will boost their sales and deliveries. Ultimately, how long it will take for these equities to recover remains to be seen. Still, investors will be closely monitoring the opening bell on Monday, 6 December, to see if the sentiment has shifted.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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Jordan Major
Author

Jordan is an investor and market analyst. He's passionate about stocks, ETFs, blockchain, and digital assets. At Finbold.com, he delves into the technicalities to obtain future trends for new market traders and gives insights into user-friendly platforms for beginners.

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