Much like the vast majority of its peers in 2024, the Chinese electric vehicle (EV) maker Nio (NYSE: NIO) has been experiencing significant pressure since the start of the year.
The issues, primarily triggered by slower-than-expected demand, have ensured that Nio is, by press time, approximately 40% in the red in the year-to-date (YTD) chart.
After a 7% decline on Wednesday appeared to have jeopardized the 30-day gains, NIO shares surged 5.78% on Thursday morning from their latest closing price of $5.02 to their press time value of $5.30.
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Why is Nio stock up today?
The rally can be explained primarily by Nio’s imminent launch of its new Onvo L60 model – generally considered a prime competitor to Tesla’s (NASDAQ: TSLA) Model Y.
The new, mid-sized vehicle is expected to help Nio capture significant market share from Elon Musk’s EV maker in China, particularly thanks to its relatively low cost of approximately $30,000.
Additionally, the Chinese electric vehicle manufacturer will likely gain even more momentum soon due to its new Firefly brand – a development that could push the entire industry to new popularity with expected price tags ranging from $14,000 to $28,000.
Nio’s Thursday gains can also, at least in part, be attributed to the rumor that the company is preparing to acquire an Audi factory in Belgium. Nio is reporetdly preparing to place a bid on the troubled factory as soon as September 23.
While the Chinese EV maker has so far declined to comment on the rumor, recent changes in EU regulations – chiefly the new duties set to be levied against Chinese manufacturers – make the reports fairly credible.
The new vehicle and brand, as well as the potential acquisition of Audi’s factory, could help bolster investor confidence in Nio and may provide the company with strong tailwinds should analysts be convinced to upgrade their forecasts.
Is Nio stock a buy right now?
Perhaps surprisingly, given its many 2024 woes, Wall Street experts have, by press time on September 19, remained mostly bullish in their outlook for the Chinese EV maker.
Out of the 34 analyst who chipped in with their opinions in the last 3 months and are represented on the stock analysis platform TradingView, as many as 21 consider Nio either a ‘buy’ or a ‘strong buy.’
Furthermore, another 12 are ‘neutral’ on the stock and only 1 recommends selling.
The 12-month price target, likewise, remains enticing after Nio’s losses since January 1. In fact, on average, the Chinese car maker is expected to climb 29.78% and reach $6.51 within the coming 52 weeks.
Recent revisions have also largely been cautiously positive. JPMorgan (NYSE: JPM), for example, upgraded its Nio stock outlook from ‘neutral’ to ‘overweight’ and assigned a new price target of $8 on September 6.
On the same day, Tiger Securities reiterated its ‘buy’ rating for Nio shares and the associated $8 price target.
On September 5, Bank of America (NYSE: BAC) also raised its price forecast from $5 to $5.30, though it reiterated the ‘neutral’ outlook.
Citigroup (NYSE: C), on the other hand, opted to retain the ‘buy’ rating on September 4, but downgraded the 12-month target from $8.50 to $7.
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