Nio stock forecast: Analysts rate NIO as a ‘strong buy’, estimating 80% upside

Nio stock forecast: Analysts rate NIO as a ‘strong buy’, estimating 80% upside
1 year ago
5 mins read

Nio Inc (NYSE: NIO), a US-listed Chinese electric car firm, finished the trading week at $37.51, up +0.42 (1.13%) on the day but down in the last five days -0.50 (-1.32%).

In total, NIO’s share price has declined by 29% since the end of June, when it was trading close to $53, and by about 30% since the beginning of the year.

The global chip shortage has proven to be a more severe and long-lasting problem than predicted for the company, despite deliveries increasing by 125% year over year in July, according to statistics published on the firm’s website.

Nio stock performance

When we look at the yearly performance of all stocks, we can see that the Shanghai-based EV manufacturer is one of the best performers, outperforming 81% of the market. 

Furthermore, NIO has a good and regular trend of price increases. This total performance, however, was mostly predicated on a big move approximately ten months ago.

In the last month, NIO has been trading in the $36.56 – $41.86 range, which is quite wide, and it is currently trading near the lows of this range. Furthermore, the stock trading in the middle of its 52-week range, the S&P 500 Index, is currently trading near new highs; thus, NIO lags the market.

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

Notably, the company is trading above its 20 and 200-day simple moving averages, which are often used as uptrend indicators by growth stock investors. Recent performance and the fact that the stock is trading above the 20-day SMA suggest the stock may see some bullish momentum in the short term.

Whatsmore, Nio does show a decent setup pattern as prices have been consolidating lately, and the volatility has been reduced. In terms of support and resistance, we discovered two crucial support areas: in the daily time zone, support comes from a horizontal line at $36.28, while in the weekly time frame, support comes from a horizontal line at $33.41.

Conversely, a resistance zone ranging from $38.44 to $38.51 is formed by a combination of multiple trend lines and important moving averages in the daily time frame.

Wall Street experts project

Certainly, despite the chip shortage and huge stock offering, on Wall Street, the sentiment is positive as experts predict the Nio stock will reach $67.52 in the next 12 months, an 80.01% increase from the current price of $37.51, with a high prognosis of $72 and a minimum forecast of – $62.

NIO analyst price target. Source: TipRanks.com

Furthermore, based on the price projections of 6 TipRanks experts‘ stock recommendations for NIO over the last three months, all six analysts advise to ‘Buy,‘ while none favor ‘Hold,‘ or ‘Sell.’

Based on their recommendations, the consensus rating for Nio stock is a ‘strong buy,’ with an 80.01% upside, making it an attractive buy for both traders and investors, as even their lowest price projection of $62 is greater than Nio’s current price of $37.51.

EV market

Nio is a leading electric vehicle (EV) maker in the world’s largest markets for electric cars. According to Finbold’s earlier research, China-based NIO had nearly double the returns (539.13%) than its nearest competitor Tesla (NASDAQ: TSLA), whose shares returned 224.93% between June 2020 and June 2021.

Elon Musk lauded China’s domestic electric vehicle manufacturers on Friday, calling the country’s automakers “the most competitive in the world.”

Even though Nio is up against the stiffer competition in China, the firm has no plans to stay there. Nio has ambitious worldwide expansion aspirations, with a focus on EV-friendly Norway as a first step.

In particular, based on our statistics, demand for new passenger battery electric (all-electric) vehicles in Europe increased 231.58% between Q2 2020 and Q2 2021, rising from 63,422 to 210,298. The data shows a tripling in demand for all-electric vehicles.

In other European countries, Nio will compete with larger and more established rivals like Tesla and Volkswagen AG (VWAGY), with Norway serving as a springboard.

The first NIO House in Norway will open on September 23 in Oslo, the country’s capital, and the pricing of the NIO ES8 offered to Norwegian consumers will be revealed at the same time.

Watch: Tesla CEO Elon Musk praises Chinese car companies at a green vehicle conference

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Jordan Major

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.