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.
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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.
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