The global electric vehicle market is becoming crowded, and Chinese electric vehicle makers are among the main reasons for this. Although it has not yet achieved profits, New (NYSE: NEO) It is one of those China-based companies that is ramping up production and exporting more and more of its high-tech electric cars to Europe and elsewhere.
Nio delivered a record 61,855 units in the third quarter and estimates it will make as many as 75,000 electric vehicle deliveries in the fourth quarter.
Start your morning smarter! Wake up with Breakfast news In your inbox every market day. Register for free »
But the stock is down more than 50% in 2024, and one Wall Street analyst thinks investors should stay away from it. Goldman Sachs Analyst Tina Ho recommends investors sell the stock, seeing it fall as low as $3.90. This is the target price It was reduced from $4.80 and would represent a 16.5% decline from Monday’s closing price.
Ho downgraded her company’s rating on the stock to sell with this forecast on Monday, according to the British Daily Mail. Baron. Management expects EV sales to nearly double in 2025 to roughly 450,000 units, but he doesn’t think the company will get close to that, even after adding two new brands to its portfolio. It believes Nio will sell just 337,000 electric cars next year.
Although that would still represent a 50% increase from 2024, he expects it means Nio’s operating losses will continue to rise. “We expect tepid demand momentum, slow ramp-up of production and delivery volumes, and intensifying price competition to act as bearish catalysts for stock prices,” it said.
Hu admitted that market demand could exceed expectations if the Chinese government provides more favorable political support.
Without that support, it believes Nio’s new lower-priced Onvo brand will hurt results further as expansion costs increase. The company will also launch a third brand, Firefly, next month. Management says it is targeting the “compact car market” and deliveries will begin in early 2025.
New needs demand to grow. Ho’s short-term prediction may be accurate, but long-term investors may still want to own the stock if it drops below $4.
Before you buy shares in Nio, keep in mind the following:
the Motley Fool stock advisor The analyst team has just defined what they think it is Top 10 stocks Let investors buy it now… and Nio wasn’t one of them. The 10 stocks that were discounted could deliver huge returns in the coming years.
Think when Nvidia I prepared this list on April 15, 2005… If you invested $1,000 at the time of our recommendation, You will have $829,378!*
Stock advisor It provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. the Stock advisor The service has More than four times The return of the S&P 500 since 2002*.
Comments are closed, but trackbacks and pingbacks are open.