In a landscape that has not been particularly kind to electric vehicle manufacturers, the Chinese automaker Nio (NYSE: NIO) has faced a notably turbulent year.
At the start of 2024, NIO shares were priced around $8.50. However, by April, the stock had plummeted to as low as $3.80 due to disappointing vehicle delivery results. The stock rebounded to $5.79 in mid-May, but was unable to maintain that momentum and subsequently fell even further, reaching $3.70.
This downward trend persisted until September, when the company secured a strategic investment of $470 million from state-backed Chinese funds. Following this, delivery numbers hit record highs, demonstrating strong double-digit year-over-year (YoY) growth, and Nio attracted investments totaling $1.9 billion. The positive developments seemed to be unending.
But then, on September 25, China’s central bank announced a stimulus package not seen since the pandemic. NIO shares surged to $7.21 on October 1 during a broader rally in the Chinese market; however, when it became clear that similar measures would not follow the initial package, investor sentiment took a downturn.
Nio’s stock was caught up in the subsequent market pullback; since reaching $7.21, the shares have decreased by 36.89%, currently trading at $4.55. On a year-to-date (YTD) basis, Nio has dropped 45.78%. Despite this, Wall Street analysts maintain a bullish outlook on the stock.
Analysts optimistic about Nio’s stock potential
Over the past three months, 15 market analysts have provided ratings and price predictions for Nio stock. More than half—specifically, 8—are ‘Buy’ ratings, while the remainder consists of 5 ‘Hold’ ratings and only 2 ‘Sell’ ratings. This marks a significant vote of confidence, especially for a stock that has seen such a decline.
Collectively, these analyses culminate in a consensus ‘Moderate Buy’ recommendation. The most intriguing aspect is the average price prediction: the lowest target for Nio stock stands at $3.90, suggesting a 14.28% decline. Conversely, the highest target from analysts reaches $8.90. The consensus is tilted towards the latter, with the average price forecast for NIO stock within the next year estimated at $6.01 per TipRanks, indicating a potential upside of 31.22%.
During the company’s Q3 2024 earnings call on November 20, investors were largely left unsatisfied. Nevertheless, with substantial institutional support and a distinctive feature in its battery-swapping technology, Nio could represent a long-term investment opportunity, although reaching profitability at its current trajectory may still take several years.
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