Nio (NYSE: NIO) has faced challenges typical of the EV industry in 2024, including lower production and delivery numbers, leading the company to adjust its targets with the early months of 2024 were particularly tough for NIO stock, witnessing a 37.41% decline.
However, the tide has turned in recent trading sessions, with a 30.45% gain for NIO shares in the past five days. This significant uptick was further boosted by an 11.65% increase after the latest market closure, which extended into pre-market trading and added another 5.31% to NIO’s value.
NIO’s recent share surge can be attributed to its latest quarterly report, suggesting that perhaps the tough times for the EV industry are beginning to ease.
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Surprisingly high deliveries compared to rivals
Investors were reassured by Nio’s strong performance compared to its competitors last month. Nio reported a significant increase in deliveries, with 15,620 EVs delivered in April, marking a 135% jump from last year.
In contrast, competitors XPeng (NYSE: XPEV) and Li Auto (NASDAQ: LI) saw much smaller increases, with year-over-year shipment growth of just 33% and 0.4%, respectively.
Nio’s introduction of the upgraded 2024 ET7 luxury sedan and a new partnership with Lotus Technology are potential catalysts for continued sales growth.
Analysts weigh in on the prospect of NIO shares reaching $10
Most analysts have yet to respond to the news of Nio’s increasing deliveries, though some recently initiated NIO stock coverage.
On April 2, Barclays analysts downgraded Nio to ‘Underweight’ from ‘Equal Weight’ and reduced the price target to $4 from $5 per share. They cited weaker March sales, indicating challenges in selling the 2024 models launched that month, putting the company’s 2024 FY consensus estimates at risk.
On May 1, Morgan Stanley analyst Tim Hsiao commented on Nio’s April delivery results and the upcoming sub-brand Onvo, setting a price target of $10 for Nio shares, implying an upside potential of 112%. Hsiao noted that April sales increased by 135% year-over-year and 32% month-over-month, reaching a year-to-date high of 15,620 units, approaching its previous peak monthly run-rate of 18,000-20,000 units.
The outlook appears to be shifting for Nio as a company and NIO as a stock. With growing deliveries and the introduction of new models, NIO shares could reach a valuation of $10 by the year’s end.
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