NIO Stock: Citi Analyst Bullish on Forecast Record Deliveries, New Models

Analyst Jeff Chung from Citi has issued a positive outlook for NIO, placing the Chinese electric vehicle manufacturer on a “positive catalyst watch” for the next 30 days. This suggests anticipation of significant near-term events that could benefit the company’s stock performance amid a challenging market environment.

Delivery Growth and New Model Momentum

A key factor behind this optimistic stance is the projected surge in vehicle deliveries for the second quarter. Chung forecasts a substantial increase, potentially exceeding the first quarter’s results by over 50%. This growth is expected to be fueled by the market reception of NIO’s newer vehicle models. With approximately 42,000 units delivered in the first quarter, the projection points towards more than 63,000 deliveries in the second quarter, which could establish a new quarterly record for the company.

Strategic Developments on the Horizon

Further bolstering the positive outlook, Chung anticipates NIO accelerating its new product launches following the Shanghai Auto Show, potentially outpacing consensus expectations. The forecast includes the introduction of 10 new models before the year concludes. Additionally, plans reportedly include rolling out new driver-assistance features starting in May and implementing strategies aimed at reducing operational costs, enhancing efficiency.

Market Reaction and Analyst Ratings

Reflecting the positive assessment, NIO’s U.S.-listed shares experienced a notable gain, rising 7% to close at $4.31 following the analyst’s report. This occurred even as NIO’s American Depositary Receipts (ADRs) had seen a decline of about 8% year-to-date prior to this development. Citi’s Jeff Chung maintains his Buy rating on NIO stock, setting a price target of $8.10 for the ADRs.

Broader Sentiment and Competitive Landscape

However, the broader analyst community shows more caution. Data indicates that 43% of analysts covering NIO currently recommend buying the stock, with the average price target sitting around $5.30. This reflects a noticeable cooling of sentiment from late last year when nearly 70% of analysts held Buy ratings. This shift is widely seen as a response to the intensifying competition within China’s dynamic electric vehicle market, characterized by frequent new model introductions from various players vying for consumer attention and market share.