In an environment that has not necessarily been favorable to EV companies, Chinese carmaker Nio (NYSE: NIO) has experienced quite a volatile year.
At the beginning of 2024, NIO stock was trading at approximately $8.50. By April, it had dropped to as low as $3.80 on account of disappointing vehicle delivery figures. It climbed back to $5.79 in the middle of May, but could not sustain those prices — and subsequently dropped even lower, to $3.70.
That sad state of affairs continued until September. The business secured a $470 million strategic investment from Chinese state-backed funds — delivery numbers broke records and showed strong double-digit year-over-year (YoY) growth, and the company even secured investments, to the total tune of $1.9 billion. The good news seemed like it would never end.
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Then, on September 25, China’s central bank unveiled a stimulus package of a magnitude not seen since the pandemic. NIO shares shot up to $7.21 on October 1 in the parabolic rally of the wider Chinese market — but when it became apparent that similar measures would not follow suit after the initial package, investors’ moods soured.
Nio stock was not spared in the ensuing pullback — since that $7.21 high, prices have dropped by 36.89%, down to $4.55 at press time. On a year-to-date (YTD) basis, Nio is down 45.78%. However, interestingly enough, Wall Street analysts are bullish — and quite so.
Equity researchers see plenty of upside for Nio stock
In the last three months, 15 market experts have issued ratings and price targets for Nio stock. More than half — to be more precise, 8, are ‘Buy’ ratings, while the rest are split between 5 ‘Hold’ ratings and only 2 ‘Sell’ ratings. That’s quite the vote of confidence — particularly for a stock that’s down as much as Nio is.
All of this adds up to a consensus ‘Moderate Buy’ rating — although the most interesting detail is the average price forecast. The lowest price target set for Nio stock is $3.90 — a figure that equates to a 14.28% downside. At the other end of the scale lies a Street high price target of $8.90. However, consensus clearly favor the latter — the average price forecast for NIO stock 12 months from now is $6.01 per TipRanks — which represents a 31.22% upside.
When the company held its Q3 2024 earnings call on November 20, investors were largely left disappointed — but with a lot of institutional backing, and a unique selling point in its swappable battery technology, Nio could be a long-term value play, though profitability is still years out at this pace.
Featured image via Shutterstock
