Chinese electric vehicle manufacturer NIO is set to reveal its second quarter earnings on September 2, with analysts predicting a loss of $0.31 per share and revenue of $2.73 billion. In the lead-up to this announcement, NIO’s stock has performed well, climbing over 21% in the past week and 42% over the last three months.
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The surge in stock price can be attributed to new product launches along with strategic pricing changes. Recently, NIO unveiled the all-new ES8 SUV, a spacious three-row model that is now available for pre-orders in China. Additionally, the company has lowered prices across its long-range vehicle range, enhancing competition with Tesla’s new six-seat YL SUV. Investor interest has also been boosted by the anticipation surrounding NIO’s new mass market ONVO brand, especially the L90 SUV.
Despite this interest, opinions on NIO’s future among Wall Street analysts are mixed.
Morgan Stanley’s Optimism
This week, Morgan Stanley analyst Tim Fuciao increased NIO’s price target from $5.90 to $6.50 while keeping a buy recommendation. Fuciao attributed this to operational enhancements and strong initial demand for the ONVO L90.
Analysts have adjusted their 2025 delivery predictions down to 330,000 units from an earlier estimate of 9%. However, Fuciao maintained his forecasts for 2026 and 2027 at 470,000 and 586,000 units, respectively, hinting that interest in the new model looks to be strong. Additionally, he raised the total margin forecast for 2026-27, suggesting that restructuring and cost-cutting could trim operating expenses for 2025 by 10%, thus improving profitability.
JP Morgan’s Cautious Stance
While Lye acknowledged the positive early reception of the ONVO L90, he cautioned that NIO’s historical volatility and intense competition within the EV market pose significant risks. He noted that while the recent gains are noteworthy, the ongoing performance of the stock may hinge on sustained demand for the L90, the timely introduction of the L80, and sales of updated models like the ES8 and the forthcoming ES9.
What’s Next for NIO?
In general, there’s a consensus among analysts on Wall Street regarding NIO’s stock, comprising three buy ratings, six holds, and one sell over the past three months. The average price target of $4.62 suggests a potential downside of about 15.34% from current prices.
